[Federal Register Volume 81, Number 220 (Tuesday, November 15, 2016)]
[Rules and Regulations]
[Pages 80170-80562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26668]



[[Page 80169]]

Vol. 81

Tuesday,

No. 220

November 15, 2016

Part II





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 405, 410, 411, et al.





Medicare Program; Revisions to Payment Policies Under the Physician Fee 
Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage 
Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss 
Ratio Data Release; Medicare Advantage Provider Network Requirements; 
Expansion of Medicare Diabetes Prevention Program Model; Medicare 
Shared Savings Program Requirements; Final Rule

Federal Register / Vol. 81 , No. 220 / Tuesday, November 15, 2016 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 417, 422, 423, 424, 425, and 460

[CMS-1654-F]
RIN 0938-AS81


Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule and Other Revisions to Part B for CY 2017; 
Medicare Advantage Bid Pricing Data Release; Medicare Advantage and 
Part D Medical Loss Ratio Data Release; Medicare Advantage Provider 
Network Requirements; Expansion of Medicare Diabetes Prevention Program 
Model; Medicare Shared Savings Program Requirements

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This major final rule addresses changes to the physician fee 
schedule and other Medicare Part B payment policies, such as changes to 
the Value Modifier, to ensure that our payment systems are updated to 
reflect changes in medical practice and the relative value of services, 
as well as changes in the statute. This final rule also includes 
changes related to the Medicare Shared Savings Program, requirements 
for Medicare Advantage Provider Networks, and provides for the release 
of certain pricing data from Medicare Advantage bids and of data from 
medical loss ratio reports submitted by Medicare health and drug plans. 
In addition, this final rule expands the Medicare Diabetes Prevention 
Program model.

DATES: These regulations are effective on January 1, 2017.

FOR FURTHER INFORMATION CONTACT: 
    Jessica Bruton, (410) 786-5991, for issues related to 
identification of potentially misvalued services and any physician 
payment issues not identified below.
    Gail Addis, (410) 786-4522, for issues related to diabetes self-
management training.
    Jaime Hermansen, (410) 786-2064, for issues related to moderate 
sedation coding and anesthesia services.
    Roberta Epps, (410) 786-4503, for issues related to PAMA section 
218(a) policy and the transition from traditional x-ray imaging to 
digital radiography.
    Ann Marshall, (410) 786-3059, for primary care issues related to 
chronic care management (CCM), burden reduction, telehealth services 
and evaluation and management services.
    Emily Yoder, (410) 786-1804, for issues related to resource 
intensive services, telehealth services and other primary care issues.
    Lindsey Baldwin, (410) 786-1694, for primary care issues related to 
behavioral health integration services.
    Geri Mondowney, (410) 786-4584, and Donta Henson, (410) 786-1947, 
for issues related to geographic practice cost indices.
    Michael Soracoe, (410) 786-6312, for issues related to the target 
and phase-in provisions, the practice expense methodology, impacts, 
conversion factor, and the valuation of pathology and surgical 
procedures.
    Pamela West, (410) 786-2302, for issues related to therapy.
    Patrick Sartini, (410) 786-9252, for issues related to malpractice 
RVUs, radiation treatment, mammography and other imaging services.
    Kathy Bryant, (410) 786-3448, for issues related to collecting data 
on resources used in furnishing global services.
    Donta Henson, (410) 786-1947, for issues related to ophthalmology 
services.
    Corinne Axelrod, (410) 786-5620, for issues related to rural health 
clinics or federally qualified health centers.
    Simone Dennis, (410) 786-8409, for issues related to FQHC-specific 
market basket.
    JoAnna Baldwin, (410) 786-7205, or Sarah Fulton, (410) 786-2749, 
for issues related to appropriate use criteria for advanced diagnostic 
imaging services.
    Robin Usi, (410) 786-0364, for issues related to open payments.
    Sean O'Grady, (410) 786-2259, or Julie Uebersax, (410) 786-9284, 
for issues related to release of pricing data from Medicare Advantage 
bids and release of medical loss ratio data submitted by Medicare 
Advantage organizations and Part D sponsors.
    Sara Vitolo, (410) 786-5714, for issues related to prohibition on 
billing qualified Medicare beneficiary individuals for Medicare cost-
sharing.
    Michelle Peterman, (410) 786-2591, for issues related to 
Accountable Care Organization (ACO) participants who report PQRS 
quality measures separately.
    Katie Mucklow, (410) 786-0537 or John Spiegel, (410) 786-1909, for 
issues related to Provider Enrollment Medicare Advantage Program.
    Jen Zhu, (410) 786-3725, Carlye Burd, (410) 786-1972, or Nina 
Brown, (410) 786-6103, for issues related to Medicare Diabetes 
Prevention Program model expansion.
    Rabia Khan or Terri Postma, (410) 786-8084 or [email protected], for 
issues related to the Medicare Shared Savings Program.
    Kimberly Spalding Bush, (410) 786-3232, or Fiona Larbi, (410) 786-
7224, for issues related to Value-based Payment Modifier and Physician 
Feedback Program.
    Lisa Ohrin Wilson, (410) 786-8852, or Gabriel Scott, (410) 786-
3928, for issues related to physician self-referral updates.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary and Background
    A. Executive Summary
    B. Background
II. Provisions of the Final Rule for PFS
    A. Determination of Practice Expense Relative Value Units (PE 
RVUs)
    B. Determination of Malpractice Relative Value Units (MRVUs)
    C. Medicare Telehealth Services
    D. Potentially Misvalued Services Under the Physician Fee 
Schedule
    1. Background
    2. Progress in Identifying and Reviewing Potentially Misvalued 
Codes
    3. Validating RVUs of Potentially Misvalued Codes
    4. CY 2017 Identification and Review of Potentially Misvalued 
Services
    5. Valuing Services That Include Moderate Sedation as an 
Inherent Part of Furnishing the Procedure
    6. Collecting Data on Resources Used in Furnishing Global 
Services
    E. Improving Payment Accuracy for Primary Care, Care Management 
Services, and Patient-Centered Services
    F. Improving Payment Accuracy for Services: Diabetes Self-
Management Training (DSMT)
    G. Target for Relative Value Adjustments for Misvalued Services
    H. Phase-In of Significant RVU Reductions
    I. Geographic Practice Cost Indices (GPCIs)
    J. Payment Incentive for the Transition From Traditional X-Ray 
Imaging to Digital Radiography and Other Imaging Services
    K. Procedures Subject to the Multiple Procedure Payment 
Reduction (MPPR) and the OPPS Cap
    L. Valuation of Specific Codes
    M. Therapy Caps
III. Other Provisions of the Final Rule for PFS
    A. Chronic Care Management (CCM) and Transitional Care 
Management (TCM) Supervision Requirements in Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs)
    B. FQHC-Specific Market Basket
    C. Appropriate Use Criteria for Advanced Diagnostic Imaging 
Services
    D. Reports of Payments or Other Transfers of Value to Covered 
Recipients: Summary of Public Comments
    E. Release of Part C Medicare Advantage Bid Pricing Data and 
Part C and Part D Medical Loss Ratio (MLR) Data

[[Page 80171]]

    F. Prohibition on Billing Qualified Medicare Beneficiary 
Individuals for Medicare Cost-Sharing
    G. Recoupment or Offset of Payments to Providers Sharing the 
Same Taxpayer Identification Number
    H. Accountable Care Organization (ACO) Participants Who Report 
Physician Quality Reporting System (PQRS) Quality Measures 
Separately
    I. Medicare Advantage Provider Enrollment
    J. Expansion of the Diabetes Prevention Program (DPP) Model
    K. Medicare Shared Savings Program
    L. Value-Based Payment Modifier and Physician Feedback Program
    M. Physician Self-Referral Updates
    N. Designated Health Services
IV. Collection of Information Requirements
V. Regulatory Impact Analysis
    Regulations Text

Acronyms

    In addition, because of the many organizations and terms to which 
we refer by acronym in this final rule, we are listing these acronyms 
and their corresponding terms in alphabetical order below:

A1c Hemoglobin A1c
AAA Abdominal aortic aneurysms
ACO Accountable care organization
AMA American Medical Association
ASC Ambulatory surgical center
ATA American Telehealth Association
ATRA American Taxpayer Relief Act (Pub. L. 112-240)
AWV Annual wellness visit
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program] 
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BLS Bureau of Labor Statistics
CAD Coronary artery disease
CAH Critical access hospital
CBSA Core-Based Statistical Area
CCM Chronic care management
CEHRT Certified EHR technology
CF Conversion factor
CG-CAHPS Clinician and Group Consumer Assessment of Healthcare 
Providers and Systems
CLFS Clinical Laboratory Fee Schedule
CoA Certificate of Accreditation
CoC Certificate of Compliance
CoR Certificate of Registration
CNM Certified nurse-midwife
CP Clinical psychologist
CPC Comprehensive Primary Care
CPEP Clinical Practice Expert Panel
CPT [Physicians] Current Procedural Terminology (CPT codes, 
descriptions and other data only are copyright 2015 American Medical 
Association. All rights reserved.)
CQM Clinical quality measure
CSW Clinical social worker
CT Computed tomography
CW Certificate of Waiver
CY Calendar year
DFAR Defense Federal Acquisition Regulations
DHS Designated health services
DM Diabetes mellitus
DSMT Diabetes self-management training
eCQM Electronic clinical quality measures
ED Emergency Department
EHR Electronic health record
E/M Evaluation and management
EMT Emergency Medical Technician
EP Eligible professional
eRx Electronic prescribing
ESRD End-stage renal disease
FAR Federal Acquisition Regulations
FDA Food and Drug Administration
FFS Fee-for-service
FQHC Federally qualified health center
FR Federal Register
FSHCAA Federally Supported Health Centers Assistance Act
GAF Geographic adjustment factor
GAO Government Accountability Office
GPCI Geographic practice cost index
GPO Group purchasing organization
GPRO Group practice reporting option
GTR Genetic Testing Registry
HCPCS Healthcare Common Procedure Coding System
HHS [Department of] Health and Human Services
HOPD Hospital outpatient department
HPSA Health professional shortage area
IDTF Independent diagnostic testing facility
IPPE Initial preventive physical exam
IPPS Inpatient Prospective Payment System
IQR Inpatient Quality Reporting
ISO Insurance service office
IT Information technology
IWPUT Intensity of work per unit of time
LCD Local coverage determination
MA Medicare Advantage
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 
114-10)
MAP Measure Applications Partnership
MAPCP Multi-payer Advanced Primary Care Practice
MAV Measure application validity [process]
MCP Monthly capitation payment
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MFP Multi-Factor Productivity
MIPPA Medicare Improvements for Patients and Providers Act (Pub. L. 
110-275)
MMA Medicare Prescription Drug, Improvement and Modernization Act of 
2003 (Pub. L. 108-173, enacted on December 8, 2003)
MP Malpractice
MPPR Multiple procedure payment reduction
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MSA Metropolitan Statistical Areas
MSPB Medicare Spending per Beneficiary
MU Meaningful use
NCD National coverage determination
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQS National Quality Strategy
OACT CMS's Office of the Actuary
OBRA '89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239)
OBRA '90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508)
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient prospective payment system
OT Occupational therapy
PA Physician assistant
PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)
PAMPA Patient Access and Medicare Protection Act (Pub. L. 114-115)
PC Professional component
PCIP Primary Care Incentive Payment
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PFS Physician Fee Schedule
PLI Professional Liability Insurance
PMA Premarket approval
PPM Provider-Performed Microscopy
PQRS Physician Quality Reporting System
PPIS Physician Practice Expense Information Survey
PPS Prospective Payment System
PT Physical therapy
PT Proficiency Testing
PT/INR Prothrombin Time/International Normalized Ratio
PY Performance year
QA Quality Assessment
QC Quality Control
QCDR Qualified clinical data registry
QRUR Quality and Resources Use Report
RBRVS Resource-based relative value scale
RFA Regulatory Flexibility Act
RHC Rural health clinic
RIA Regulatory impact analysis
RUC American Medical Association/Specialty Society Relative (Value) 
Update Committee
RUCA Rural Urban Commuting Area
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SIM State Innovation Model
SLP Speech-language pathology
SMS Socioeconomic Monitoring System
SNF Skilled nursing facility
TAP Technical Advisory Panel
TC Technical component
TIN Tax identification number
TCM Transitional Care Management
UAF Update adjustment factor
UPIN Unique Physician Identification Number
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
VM Value-Based Payment Modifier

Addenda Available Only Through the Internet on the CMS Web Site

    The PFS Addenda along with other supporting documents and tables 
referenced in this final rule are available through the Internet on the 
CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Click on 
the link on the left side of the screen titled,

[[Page 80172]]

``PFS Federal Regulations Notices'' for a chronological list of PFS 
Federal Register and other related documents. For the CY 2017 PFS Final 
Rule, refer to item CMS-1654-F. Readers who experience any problems 
accessing any of the Addenda or other documents referenced in this rule 
and posted on the CMS Web site identified above should contact Jessica 
Bruton at (410) 786-5991.

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this final rule, we use CPT codes and descriptions to 
refer to a variety of services. We note that CPT codes and descriptions 
are copyright 2015 American Medical Association. All Rights Reserved. 
CPT is a registered trademark of the American Medical Association 
(AMA). Applicable Federal Acquisition Regulations (FAR) and Defense 
Federal Acquisition Regulations (DFAR) apply.

I. Executive Summary and Background

A. Executive Summary

1. Purpose
    This major final rule revises payment polices under the Medicare 
Physician Fee Schedule (PFS) and makes other policy changes related to 
Medicare Part B payment. These changes will be applicable to services 
furnished in CY 2017. In addition, this final rule includes the 
following provisions: Payment policy changes for Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs); expansion of the 
Medicare Diabetes Prevention Program model; policy changes related to 
the Medicare Shared Savings Program; and release of pricing data 
submitted to CMS by Medicare Advantage (MA) organizations; and medical 
loss ratio reports submitted by MA plans and Part D plans. These 
additional policies are addressed in section III. of this final rule.
2. Summary of the Major Provisions
    The statute requires us to establish payments under the PFS based 
on national uniform relative value units (RVUs) that account for the 
relative resources used in furnishing a service. The statute requires 
that RVUs be established for three categories of resources: Work, 
practice expense (PE); and malpractice (MP) expense; and, that we 
establish by regulation each year's payment amounts for all physicians' 
services paid under the PFS, incorporating geographic adjustments to 
reflect the variations in the costs of furnishing services in different 
geographic areas. In this major final rule, we establish RVUs for CY 
2017 for the PFS, and other Medicare Part B payment policies, to ensure 
that our payment systems are updated to reflect changes in medical 
practice and the relative value of services, as well as changes in the 
statute. In addition, this final rule includes summaries of public 
comments and final policies regarding:
     Potentially Misvalued Codes.
     Telehealth Services.
     Establishing Values for New, Revised, and Misvalued Codes.
     Target for Relative Value Adjustments for Misvalued 
Services.
     Phase-in of Significant RVU Reductions.
     Chronic Care Management (CCM) and Transitional Care 
Management (TCM) Supervision Requirements in Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs).
     FQHC-Specific Market Basket.
     Appropriate Use Criteria for Advanced Diagnostic Imaging 
Services.
     Reports of Payments or Other Transfers of Value to Covered 
Recipients: Solicitation of Public Comments.
     Release of Part C Medicare Advantage Bid Pricing Data and 
Part C and Part D Medical Loss Ratio (MLR) Data.
     Prohibition on Billing Qualified Medicare Beneficiary 
Individuals for Medicare Cost-Sharing.
     Recoupment or Offset of Payments to Providers Sharing the 
Same Taxpayer Identification Number.
     Accountable Care Organization (ACO) Participants Who 
Report Physician Quality Reporting System (PQRS) Quality Measures 
Separately.
     Medicare Advantage Provider Enrollment.
     Expansion of the Diabetes Prevention Program (DPP) Model.
     Medicare Shared Savings Program.
     Value-Based Payment Modifier and the Physician Feedback 
Program.
     Physician Self-referral Updates.
     Designated Health Services.
3. Summary of Costs and Benefits
    The statute requires that annual adjustments to PFS RVUs may not 
cause annual estimated expenditures to differ by more than $20 million 
from what they would have been had the adjustments not been made. If 
adjustments to RVUs would cause expenditures to change by more than $20 
million, we must make adjustments to preserve budget neutrality. These 
adjustments can affect the distribution of Medicare expenditures across 
specialties. In addition, several changes in this final rule will 
affect the specialty distribution of Medicare expenditures. When 
considering the combined impact of work, PE, and MP RVU changes, the 
projected payment impacts would be small for most specialties; however, 
the impact would be larger for a few specialties.
    We have determined that this major final rule is economically 
significant. For a detailed discussion of the economic impacts, see 
section VI. of this final rule.

B. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of the Social Security Act (the Act), ``Payment for 
Physicians' Services.'' The PFS relies on national relative values that 
are established for work, PE, and MP, which are adjusted for geographic 
cost variations. These values are multiplied by a conversion factor 
(CF) to convert the RVUs into payment rates. The concepts and 
methodology underlying the PFS were enacted as part of the Omnibus 
Budget Reconciliation Act of 1989 (Pub. L. 101-239, enacted on December 
19, 1989) (OBRA '89), and the Omnibus Budget Reconciliation Act of 1990 
(Pub. L. 101-508, enacted on November 5, 1990) (OBRA '90). The final 
rule published on November 25, 1991 (56 FR 59502) set forth the first 
fee schedule used for payment for physicians' services.
    We note that throughout this major final rule, unless otherwise 
noted, the term ``practitioner'' is used to describe both physicians 
and nonphysician practitioners (NPPs) who are permitted to bill 
Medicare under the PFS for services furnished to Medicare 
beneficiaries.
1. Development of the Relative Values
a. Work RVUs
    The work RVUs established for the initial fee schedule, which was 
implemented on January 1, 1992, were developed with extensive input 
from the physician community. A research team at the Harvard School of 
Public Health developed the original work RVUs for most codes under a 
cooperative agreement with the Department of Health and Human Services 
(HHS). In constructing the code-specific vignettes used in determining 
the original physician work RVUs, Harvard worked with panels of 
experts, both inside and outside the federal government, and obtained 
input from numerous physician specialty groups.
    As specified in section 1848(c)(1)(A) of the Act, the work 
component of physicians' services means the portion

[[Page 80173]]

of the resources used in furnishing the service that reflects physician 
time and intensity. We establish work RVUs for new, revised and 
potentially misvalued codes based on our review of information that 
generally includes, but is not limited to, recommendations received 
from the American Medical Association/Specialty Society Relative Value 
Update Committee (RUC), the Health Care Professionals Advisory 
Committee (HCPAC), the Medicare Payment Advisory Commission (MedPAC), 
and other public commenters; medical literature and comparative 
databases; as well as a comparison of the work for other codes within 
the Medicare PFS, and consultation with other physicians and health 
care professionals within CMS and the federal government. We also 
assess the methodology and data used to develop the recommendations 
submitted to us by the RUC and other public commenters, and the 
rationale for their recommendations. In the CY 2011 PFS final rule with 
comment period (75 FR 73328 through 73329), we discussed a variety of 
methodologies and approaches used to develop work RVUs, including 
survey data, building blocks, crosswalk to key reference or similar 
codes, and magnitude estimation. More information on these issues is 
available in that rule.
b. Practice Expense RVUs
    Initially, only the work RVUs were resource-based, and the PE and 
MP RVUs were based on average allowable charges. Section 121 of the 
Social Security Act Amendments of 1994 (Pub. L. 103-432, enacted on 
October 31, 1994), amended section 1848(c)(2)(C)(ii) of the Act and 
required us to develop resource-based PE RVUs for each physicians' 
service beginning in 1998. We were required to consider general 
categories of expenses (such as office rent and wages of personnel, but 
excluding malpractice expenses) comprising PEs. The PE RVUs continue to 
represent the portion of these resources involved in furnishing PFS 
services.
    Originally, the resource-based method was to be used beginning in 
1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L. 
105-33, enacted on August 5, 1997) (BBA) delayed implementation of the 
resource-based PE RVU system until January 1, 1999. In addition, 
section 4505(b) of the BBA provided for a 4-year transition period from 
the charge-based PE RVUs to the resource-based PE RVUs.
    We established the resource-based PE RVUs for each physicians' 
service in a final rule, published on November 2, 1998 (63 FR 58814), 
effective for services furnished in CY 1999. Based on the requirement 
to transition to a resource-based system for PE over a 4-year period, 
payment rates were not fully based upon resource-based PE RVUs until CY 
2002. This resource-based system was based on two significant sources 
of actual PE data: The Clinical Practice Expert Panel (CPEP) data; and 
the AMA's Socioeconomic Monitoring System (SMS) data. (These data 
sources are described in greater detail in the CY 2012 final rule with 
comment period (76 FR 73033).
    Separate PE RVUs are established for services furnished in facility 
settings, such as a hospital outpatient department (HOPD) or an 
ambulatory surgical center (ASC), and in nonfacility settings, such as 
a physician's office. The nonfacility RVUs reflect all of the direct 
and indirect PEs involved in furnishing a service described by a 
particular HCPCS code. The difference, if any, in these PE RVUs 
generally results in a higher payment in the nonfacility setting 
because in the facility settings some costs are borne by the facility. 
Medicare's payment to the facility (such as the outpatient prospective 
payment system (OPPS) payment to the HOPD) would reflect costs 
typically incurred by the facility. Thus, payment associated with those 
facility resources is not made under the PFS.
    Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 
106-113, enacted on November 29, 1999) (BBRA) directed the Secretary of 
Health and Human Services (the Secretary) to establish a process under 
which we accept and use, to the maximum extent practicable and 
consistent with sound data practices, data collected or developed by 
entities and organizations to supplement the data we normally collect 
in determining the PE component. On May 3, 2000, we published the 
interim final rule (65 FR 25664) that set forth the criteria for the 
submission of these supplemental PE survey data. The criteria were 
modified in response to comments received, and published in the Federal 
Register (65 FR 65376) as part of a November 1, 2000 final rule. The 
PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 
and 68 FR 63196) extended the period during which we would accept these 
supplemental data through March 1, 2005.
    In the CY 2007 PFS final rule with comment period (71 FR 69624), we 
revised the methodology for calculating direct PE RVUs from the top-
down to the bottom-up methodology beginning in CY 2007. We adopted a 4-
year transition to the new PE RVUs. This transition was completed for 
CY 2010. In the CY 2010 PFS final rule with comment period, we updated 
the practice expense per hour (PE/HR) data that are used in the 
calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010, 
we began a 4-year transition to the new PE RVUs using the updated PE/HR 
data, which was completed for CY 2013.
c. Malpractice RVUs
    Section 4505(f) of the BBA amended section 1848(c) of the Act to 
require that we implement resource-based MP RVUs for services furnished 
on or after CY 2000. The resource-based MP RVUs were implemented in the 
PFS final rule with comment period published November 2, 1999 (64 FR 
59380). The MP RVUs are based on commercial and physician-owned 
insurers' malpractice insurance premium data from all the states, the 
District of Columbia, and Puerto Rico. For more information on MP RVUs, 
see section II.B.2. of this final rule.
d. Refinements to the RVUs
    Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no 
less often than every 5 years. Prior to CY 2013, we conducted periodic 
reviews of work RVUs and PE RVUs independently. We completed five-year 
reviews of work RVUs that were effective for calendar years 1997, 2002, 
2007, and 2012.
    Although refinements to the direct PE inputs initially relied 
heavily on input from the RUC Practice Expense Advisory Committee 
(PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to 
the use of the updated PE/HR data in CY 2010 have resulted in 
significant refinements to the PE RVUs in recent years.
    In the CY 2012 PFS final rule with comment period (76 FR 73057), we 
finalized a proposal to consolidate reviews of work and PE RVUs under 
section 1848(c)(2)(B) of the Act and reviews of potentially misvalued 
codes under section 1848(c)(2)(K) of the Act into one annual process.
    In addition to the five-year reviews, beginning for CY 2009, CMS 
and the RUC have identified and reviewed a number of potentially 
misvalued codes on an annual basis based on various identification 
screens. This annual review of work and PE RVUs for potentially 
misvalued codes was supplemented by the amendments to section 1848 of 
the Act, as enacted by section 3134 of the Affordable Care Act, that 
require the agency to periodically

[[Page 80174]]

identify, review and adjust values for potentially misvalued codes.
e. Application of Budget Neutrality to Adjustments of RVUs
    As described in section VI.C. of this final rule, in accordance 
with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs 
cause expenditures for the year to change by more than $20 million, we 
make adjustments to ensure that expenditures did not increase or 
decrease by more than $20 million.
2. Calculation of Payments Based on RVUs
    To calculate the payment for each service, the components of the 
fee schedule (work, PE, and MP RVUs) are adjusted by geographic 
practice cost indices (GPCIs) to reflect the variations in the costs of 
furnishing the services. The GPCIs reflect the relative costs of work, 
PE, and MP in an area compared to the national average costs for each 
component.
    RVUs are converted to dollar amounts through the application of a 
CF, which is calculated based on a statutory formula by CMS's Office of 
the Actuary (OACT). The formula for calculating the Medicare fee 
schedule payment amount for a given service and fee schedule area can 
be expressed as:

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU MP x GPCI 
MP)] x CF.
3. Separate Fee Schedule Methodology for Anesthesia Services
    Section 1848(b)(2)(B) of the Act specifies that the fee schedule 
amounts for anesthesia services are to be based on a uniform relative 
value guide, with appropriate adjustment of an anesthesia conversion 
factor, in a manner to ensure that fee schedule amounts for anesthesia 
services are consistent with those for other services of comparable 
value. Therefore, there is a separate fee schedule methodology for 
anesthesia services. Specifically, we establish a separate conversion 
factor for anesthesia services and we utilize the uniform relative 
value guide, or base units, as well as time units, to calculate the fee 
schedule amounts for anesthesia services. Since anesthesia services are 
not valued using RVUs, a separate methodology for locality adjustments 
is also necessary. This involves an adjustment to the national 
anesthesia CF for each payment locality.
4. Most Recent Changes to the Fee Schedule
    Section 220(d) of the Protecting Access to Medicare Act of 2014 
(Pub. L. 113-93, enacted on April 1, 2014) (PAMA) added a new 
subparagraph (O) to section 1848(c)(2) of the Act to establish an 
annual target for reductions in PFS expenditures resulting from 
adjustments to relative values of misvalued codes. If the estimated net 
reduction in expenditures for a year is equal to or greater than the 
target for that year, the provision specifies that reduced expenditures 
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS. The provision specifies that the amount 
by which such reduced expenditures exceed the target for a given year 
shall be treated as a reduction in expenditures for the subsequent year 
for purposes of determining whether the target for the subsequent year 
has been met. The provision also specifies that an amount equal to the 
difference between the target and the estimated net reduction in 
expenditures, called the target recapture amount, shall not be taken 
into account when applying the budget neutrality requirements specified 
in section 1848(c)(2)(B)(ii)(II) of the Act. The PAMA amendments 
originally made the target provisions applicable for CYs 2017 through 
2020 and set the target for reduced expenditures at 0.5 percent of 
estimated expenditures under the PFS for each of those 4 years.
    Subsequently, section 202 of the Achieving a Better Life Experience 
Act of 2014 (Division B of Pub. L. 113-295, enacted December 19, 2014) 
(ABLE) accelerated the application of the target, amending section 
1848(c)(2)(O) of the Act to specify that target provisions apply for 
CYs 2016, 2017, and 2018; and setting a 1 percent target for reduced 
expenditures for CY 2016 and a 0.5 percent target for CYs 2017 and 
2018. The implementation of the target legislation was finalized in the 
CY 2016 PFS final rule with comment period, and revisions are discussed 
in section II.G. of this final rule.
    Section 1848(c)(7) of the Act, as added by section 220(e) of the 
PAMA, specified that for services that are not new or revised codes, if 
the total RVUs for a service for a year would otherwise be decreased by 
an estimated 20 percent or more as compared to the total RVUs for the 
previous year, the applicable adjustments in work, PE, and MP RVUs 
shall be phased in over a 2-year period. Section 220(e) of the PAMA 
required the phase-in of RVU reductions of 20 percent or more to begin 
for 2017. Section 1848(c)(7) of the Act was later amended by section 
202 of the ABLE Act to require instead that the phase-in must begin in 
CY 2016. The implementation of the phase-in legislation was finalized 
in the CY 2016 PFS final rule with comment period and revisions in this 
year's rulemaking are discussed in section II.H. of this final rule.

II. Provisions of the Final Rule for PFS

A. Determination of Practice Expense (PE) Relative Value Units (RVUs)

1. Overview
    Practice expense (PE) is the portion of the resources used in 
furnishing a service that reflects the general categories of physician 
and practitioner expenses, such as office rent and personnel wages, but 
excluding malpractice expenses, as specified in section 1848(c)(1)(B) 
of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use 
a resource-based system for determining PE RVUs for each physicians' 
service. We develop PE RVUs by considering the direct and indirect 
practice resources involved in furnishing each service. Direct expense 
categories include clinical labor, medical supplies, and medical 
equipment. Indirect expenses include administrative labor, office 
expense, and all other expenses. The sections that follow provide more 
detailed information about the methodology for translating the 
resources involved in furnishing each service into service-specific PE 
RVUs. We refer readers to the CY 2010 PFS final rule with comment 
period (74 FR 61743 through 61748) for a more detailed explanation of 
the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
    We determine the direct PE for a specific service by adding the 
costs of the direct resources (that is, the clinical staff, medical 
supplies, and medical equipment) typically involved with furnishing 
that service. The costs of the resources are calculated using the 
refined direct PE inputs assigned to each CPT code in our PE database, 
which are generally based on our review of recommendations received 
from the RUC and those provided in response to public comment periods. 
For a detailed explanation of the direct PE methodology, including 
examples, we refer readers to the Five-Year Review of Work Relative 
Value Units under the PFS and Proposed Changes to the Practice Expense 
Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final 
rule with comment period (71 FR 69629).

[[Page 80175]]

b. Indirect Practice Expense per Hour Data
    We use survey data on indirect PEs incurred per hour worked in 
developing the indirect portion of the PE RVUs. Prior to CY 2010, we 
primarily used the practice expense per hour (PE/HR) by specialty that 
was obtained from the AMA's Socioeconomic Monitoring Surveys (SMS). The 
AMA administered a new survey in CY 2007 and CY 2008, the Physician 
Practice Expense Information Survey (PPIS). The PPIS is a 
multispecialty, nationally representative, PE survey of both physicians 
and nonphysician practitioners (NPPs) paid under the PFS using a survey 
instrument and methods highly consistent with those used for the SMS 
and the supplemental surveys. The PPIS gathered information from 3,656 
respondents across 51 physician specialty and health care professional 
groups. We believe the PPIS is the most comprehensive source of PE 
survey information available. We used the PPIS data to update the PE/HR 
data for the CY 2010 PFS for almost all of the Medicare-recognized 
specialties that participated in the survey.
    When we began using the PPIS data in CY 2010, we did not change the 
PE RVU methodology itself or the manner in which the PE/HR data are 
used in that methodology. We only updated the PE/HR data based on the 
new survey. Furthermore, as we explained in the CY 2010 PFS final rule 
with comment period (74 FR 61751), because of the magnitude of payment 
reductions for some specialties resulting from the use of the PPIS 
data, we transitioned its use over a 4-year period from the previous PE 
RVUs to the PE RVUs developed using the new PPIS data. As provided in 
the CY 2010 PFS final rule with comment period (74 FR 61751), the 
transition to the PPIS data was complete for CY 2013. Therefore, PE 
RVUs from CY 2013 forward are developed based entirely on the PPIS 
data, except as noted in this section.
    Section 1848(c)(2)(H)(i) of the Act requires us to use the medical 
oncology supplemental survey data submitted in 2003 for oncology drug 
administration services. Therefore, the PE/HR for medical oncology, 
hematology, and hematology/oncology reflects the continued use of these 
supplemental survey data.
    Supplemental survey data on independent labs from the College of 
American Pathologists were implemented for payments beginning in CY 
2005. Supplemental survey data from the National Coalition of Quality 
Diagnostic Imaging Services (NCQDIS), representing independent 
diagnostic testing facilities (IDTFs), were blended with supplementary 
survey data from the American College of Radiology (ACR) and 
implemented for payments beginning in CY 2007. Neither IDTFs, nor 
independent labs, participated in the PPIS. Therefore, we continue to 
use the PE/HR that was developed from their supplemental survey data.
    Consistent with our past practice, the previous indirect PE/HR 
values from the supplemental surveys for these specialties were updated 
to CY 2006 using the Medicare Economic Index (MEI) to put them on a 
comparable basis with the PPIS data.
    We also do not use the PPIS data for reproductive endocrinology and 
spine surgery since these specialties currently are not separately 
recognized by Medicare, nor do we have a method to blend the PPIS data 
with Medicare-recognized specialty data.
    Previously, we established PE/HR values for various specialties 
without SMS or supplemental survey data by crosswalking them to other 
similar specialties to estimate a proxy PE/HR. For specialties that 
were part of the PPIS for which we previously used a crosswalked PE/HR, 
we instead used the PPIS-based PE/HR. We continue previous crosswalks 
for specialties that did not participate in the PPIS. However, 
beginning in CY 2010, we changed the PE/HR crosswalk for portable X-ray 
suppliers from radiology to IDTF, a more appropriate crosswalk because 
these specialties are more similar to each other for work time.
    For registered dietician services, the resource-based PE RVUs have 
been calculated in accordance with the final policy that crosswalks the 
specialty to the ``All Physicians'' PE/HR data, as adopted in the CY 
2010 PFS final rule with comment period (74 FR 61752) and discussed in 
more detail in the CY 2011 PFS final rule with comment period (75 FR 
73183). We have incorporated the available utilization data for 
interventional cardiology, which became a recognized Medicare specialty 
during 2014. We finalized the use of a proxy PE/HR value for 
interventional cardiology in the CY 2016 final rule with comment period 
(80 FR 70892), as there are no PPIS data for this specialty, by 
crosswalking the PE/HR from Cardiology, since the specialties furnish 
similar services in the Medicare claims data.
    Comment: A commenter questioned the validity of the PPIS survey 
data since it is nearly 10 years old. Several other commenters stated 
that CMS' estimated per-minute labor cost inputs are lower than actual 
labor costs.
    Response: We have previously identified several concerns regarding 
the underlying data used in determining PE RVUs in the CY 2014 PFS 
final rule (78 FR 74246-74247). Even when we first incorporated the 
survey data into the PE methodology, many in the community expressed 
serious concerns over the accuracy of this or other PE surveys as a way 
of gathering data on PE inputs from the diversity of providers paid 
under the PFS. However, we currently lack another source of 
comprehensive data regarding PE costs, and as a result, we continue to 
believe that the PPIS survey data is the best data currently available. 
We continue to seek the best broad-based, auditable, routinely-updated 
source of information regarding PE costs.
c. Allocation of PE to Services
    To establish PE RVUs for specific services, it is necessary to 
establish the direct and indirect PE associated with each service.
(1) Direct Costs
    The relative relationship between the direct cost portions of the 
PE RVUs for any two services is determined by the relative relationship 
between the sum of the direct cost resources (that is, the clinical 
staff, medical supplies, and medical equipment) typically involved with 
furnishing each of the services. The costs of these resources are 
calculated from the refined direct PE inputs in our PE database. For 
example, if one service has a direct cost sum of $400 from our PE 
database and another service has a direct cost sum of $200, the direct 
portion of the PE RVUs of the first service would be twice as much as 
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
    Section II.A.2.b. of this final rule describes the current data 
sources for specialty-specific indirect costs used in our PE 
calculations. We allocated the indirect costs to the code level on the 
basis of the direct costs specifically associated with a code and the 
greater of either the clinical labor costs or the work RVUs. We also 
incorporated the survey data described earlier in the PE/HR discussion. 
The general approach to developing the indirect portion of the PE RVUs 
is as follows:
     For a given service, we used the direct portion of the PE 
RVUs calculated as previously described and the average percentage that 
direct costs represent of total costs (based on survey data) across the 
specialties that furnish the service to determine an initial indirect 
allocator. That is, the initial indirect allocator is

[[Page 80176]]

calculated so that the direct costs equal the average percentage of 
direct costs of those specialties furnishing the service. For example, 
if the direct portion of the PE RVUs for a given service is 2.00 and 
direct costs, on average, represented 25 percent of total costs for the 
specialties that furnished the service, the initial indirect allocator 
would be calculated so that it equals 75 percent of the total PE RVUs. 
Thus, in this example, the initial indirect allocator would equal 6.00, 
resulting in a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 
6.00 is 75 percent of 8.00).
     Next, we added the greater of the work RVUs or clinical 
labor portion of the direct portion of the PE RVUs to this initial 
indirect allocator. In our example, if this service had a work RVU of 
4.00 and the clinical labor portion of the direct PE RVU was 1.50, we 
would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) to the initial indirect allocator of 6.00 to 
get an indirect allocator of 10.00. In the absence of any further use 
of the survey data, the relative relationship between the indirect cost 
portions of the PE RVUs for any two services would be determined by the 
relative relationship between these indirect cost allocators. For 
example, if one service had an indirect cost allocator of 10.00 and 
another service had an indirect cost allocator of 5.00, the indirect 
portion of the PE RVUs of the first service would be twice as great as 
the indirect portion of the PE RVUs for the second service.
     Next, we incorporated the specialty-specific indirect PE/
HR data into the calculation. In our example, if, based on the survey 
data, the average indirect cost of the specialties furnishing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties furnishing the second service with an indirect 
allocator of 5.00, the indirect portion of the PE RVUs of the first 
service would be equal to that of the second service.
(3) Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a facility setting, where Medicare makes a separate payment 
to the facility for its costs in furnishing a service, we establish two 
PE RVUs: Facility, and nonfacility. The methodology for calculating PE 
RVUs is the same for both the facility and nonfacility RVUs, but is 
applied independently to yield two separate PE RVUs. In calculating the 
PE RVUs for services furnished in a facility, we do not include 
resources that would generally not be provided by physicians when 
furnishing the service. For this reason, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs.
(4) Services With Technical Components (TCs) and Professional 
Components (PCs)
    Diagnostic services are generally comprised of two components: A 
professional component (PC) and a technical component (TC). The PC and 
TC may be furnished independently or by different providers, or they 
may be furnished together as a ``global'' service. When services have 
separately billable PC and TC components, the payment for the global 
service equals the sum of the payment for the TC and PC. To achieve 
this, we use a weighted average of the ratio of indirect to direct 
costs across all the specialties that furnish the global service, TCs, 
and PCs; that is, we apply the same weighted average indirect 
percentage factor to allocate indirect expenses to the global service, 
PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum 
to the global.)
(5) PE RVU Methodology
    For a more detailed description of the PE RVU methodology, we refer 
readers to the CY 2010 PFS final rule with comment period (74 FR 61745 
through 61746). We also direct interested readers to the file called 
``Calculation of PE RVUs under Methodology for Selected Codes'' which 
is available on our Web site under downloads for the CY 2017 PFS final 
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This file 
contains a table that illustrates the calculation of PE RVUs as 
described below for individual codes.
(a) Setup File
    First, we create a setup file for the PE methodology. The setup 
file contains the direct cost inputs, the utilization for each 
procedure code at the specialty and facility/nonfacility place of 
service level, and the specialty-specific PE/HR data calculated from 
the surveys.
(b) Calculate the Direct Cost PE RVUs
    Sum the costs of each direct input.
    Step 1: Sum the direct costs of the inputs for each service.
    Step 2: Calculate the aggregate pool of direct PE costs for the 
current year. We set the aggregate pool of PE costs equal to the 
product of the ratio of the current aggregate PE RVUs to current 
aggregate work RVUs and the proposed aggregate work RVUs.
    Step 3: Calculate the aggregate pool of direct PE costs for use in 
ratesetting. This is the product of the aggregate direct costs for all 
services from Step 1 and the utilization data for that service.
    Step 4: Using the results of Step 2 and Step 3, use the conversion 
factor to calculate a direct PE scaling factor to ensure that the 
aggregate pool of direct PE costs calculated in Step 3 does not vary 
from the aggregate pool of direct PE costs for the current year. Apply 
the scaling factor to the direct costs for each service (as calculated 
in Step 1).
    Step 5: Convert the results of Step 4 to an RVU scale for each 
service. To do this, divide the results of Step 4 by the CF. Note that 
the actual value of the CF used in this calculation does not influence 
the final direct cost PE RVUs, as long as the same CF is used in Step 4 
and Step 5. Different CFs will result in different direct PE scaling 
factors, but this has no effect on the final direct cost PE RVUs since 
changes in the CFs and changes in the associated direct scaling factors 
offset one another.
(c) Create the Indirect Cost PE RVUs
    Create indirect allocators.
    Step 6: Based on the survey data, calculate direct and indirect PE 
percentages for each physician specialty.
    Step 7: Calculate direct and indirect PE percentages at the service 
level by taking a weighted average of the results of Step 6 for the 
specialties that furnish the service. Note that for services with TCs 
and PCs, the direct and indirect percentages for a given service do not 
vary by the PC, TC, and global service.
    We use an average of the 3 most recent years of available Medicare 
claims data to determine the specialty mix assigned to each code. As we 
stated in the CY 2016 final rule with comment period (80 FR 70894), we 
believe that the 3-year average will mitigate the need to use dominant 
or expected specialty instead of the claims data. Because we 
incorporated CY 2015 claims data for use in the CY 2017 proposed rates, 
we believe that the finalized PE RVUs associated with the CY 2017 PFS 
final rule provide a first opportunity to determine whether service-
level overrides of claims data are necessary. Currently, in the 
development of PE RVUs we apply only the overrides that also apply to 
the MP RVU calculation. Since the proposed PE RVUs include a new year 
of claims into the 3-year average for the first time, we solicited 
comment on the proposed CY 2017 PFS rates and whether or not the 
incorporation of a new year of utilization data into a 3-year average 
mitigates the need for alternative service-level overrides such as a 
claims-based approach (dominant specialty) or stakeholder-recommended 
approach

[[Page 80177]]

(expected specialty) in the development of PE (and MP) RVUs for low-
volume codes. Prior year RVUs are available at several locations on the 
PFS Web site located at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
    Comment: Several commenters contended that even a multi-year 
average of claims data to determine the mix of specialties that furnish 
the services creates distortions and wide variability for low volume 
services, particularly those services with fewer than 100 annual 
Medicare claims. Commenters stated that low volume codes that use a 
specialty override appear to have stable PE and MP RVUs, while other 
low volume codes without overrides continue to shift from year to year. 
Given these fluctuations, commenters suggested that CMS implement 
service-level overrides to determine the specialty mix for these low 
volume procedures. These commenters provided a list of nearly 2000 
codes and suggested specialty overrides.
    Response: We appreciate commenters' interest in relatively stable 
PE and MP RVUs and for continuing to highlight the challenges faced 
when determining the specialty allocation for low volume services. 
Since we did not make a proposal regarding specialty overrides for low 
volume services, we do not believe that it would be appropriate to 
establish overrides for several thousand codes at this time. However, 
given the continued concerns, we will consider the issue, including 
these specific recommendations, for future rulemaking.
    Step 8: Calculate the service level allocators for the indirect PEs 
based on the percentages calculated in Step 7. The indirect PEs are 
allocated based on the three components: The direct PE RVUs; the 
clinical labor PE RVUs; and the work RVUs.
    For most services the indirect allocator is: Indirect PE percentage 
* (direct PE RVUs/direct percentage) + work RVUs.
    There are two situations where this formula is modified:
     If the service is a global service (that is, a service 
with global, professional, and technical components), then the indirect 
PE allocator is: Indirect percentage (direct PE RVUs/direct percentage) 
+ clinical labor PE RVUs + work RVUs.
     If the clinical labor PE RVUs exceed the work RVUs (and 
the service is not a global service), then the indirect allocator is: 
Indirect PE percentage (direct PE RVUs/direct percentage) + clinical 
labor PE RVUs.
    (Note: For global services, the indirect PE allocator is based on 
both the work RVUs and the clinical labor PE RVUs. We do this to 
recognize that, for the PC service, indirect PEs will be allocated 
using the work RVUs, and for the TC service, indirect PEs will be 
allocated using the direct PE RVUs and the clinical labor PE RVUs. This 
also allows the global component RVUs to equal the sum of the PC and TC 
RVUs.)
    For presentation purposes, in the examples in the download file 
called ``Calculation of PE RVUs under Methodology for Selected Codes'', 
the formulas were divided into two parts for each service.
     The first part does not vary by service and is the 
indirect percentage (direct PE RVUs/direct percentage).
     The second part is either the work RVU, clinical labor PE 
RVU, or both depending on whether the service is a global service and 
whether the clinical PE RVUs exceed the work RVUs (as described earlier 
in this step).
    Apply a scaling adjustment to the indirect allocators.
    Step 9: Calculate the current aggregate pool of indirect PE RVUs by 
multiplying the result of step 8 by the average indirect PE percentage 
from the survey data.
    Step 10: Calculate an aggregate pool of indirect PE RVUs for all 
PFS services by adding the product of the indirect PE allocators for a 
service from Step 8 and the utilization data for that service.
    Step 11: Using the results of Step 9 and Step 10, calculate an 
indirect PE adjustment so that the aggregate indirect allocation does 
not exceed the available aggregate indirect PE RVUs and apply it to 
indirect allocators calculated in Step 8.
    Calculate the indirect practice cost index.
    Step 12: Using the results of Step 11, calculate aggregate pools of 
specialty-specific adjusted indirect PE allocators for all PFS services 
for a specialty by adding the product of the adjusted indirect PE 
allocator for each service and the utilization data for that service.
    Step 13: Using the specialty-specific indirect PE/HR data, 
calculate specialty-specific aggregate pools of indirect PE for all PFS 
services for that specialty by adding the product of the indirect PE/HR 
for the specialty, the work time for the service, and the specialty's 
utilization for the service across all services furnished by the 
specialty.
    Step 14: Using the results of Step 12 and Step 13, calculate the 
specialty-specific indirect PE scaling factors.
    Step 15: Using the results of Step 14, calculate an indirect 
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor 
for the entire PFS.
    Step 16: Calculate the indirect practice cost index at the service 
level to ensure the capture of all indirect costs. Calculate a weighted 
average of the practice cost index values for the specialties that 
furnish the service. (Note: For services with TCs and PCs, we calculate 
the indirect practice cost index across the global service, PCs, and 
TCs. Under this method, the indirect practice cost index for a given 
service (for example, echocardiogram) does not vary by the PC, TC, and 
global service.)
    Step 17: Apply the service level indirect practice cost index 
calculated in Step 16 to the service level adjusted indirect allocators 
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
    Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs 
from Step 17 and apply the final PE budget neutrality (BN) adjustment. 
The final PE BN adjustment is calculated by comparing the sum of steps 
5 and 17 of to the proposed aggregate work RVUs scaled by the ratio of 
current aggregate PE and work RVUs. This adjustment ensures that all PE 
RVUs in the PFS account for the fact that certain specialties are 
excluded from the calculation of PE RVUs but included in maintaining 
overall PFS budget neutrality. (See ``Specialties excluded from 
ratesetting calculation'' later in this section.)
(e) Setup File Information
     Specialties excluded from ratesetting calculation: For the 
purposes of calculating the PE RVUs, we exclude certain specialties, 
such as certain NPPs paid at a percentage of the PFS and low-volume 
specialties, from the calculation. These specialties are included for 
the purposes of calculating the BN adjustment. They are displayed in 
Table 1.

       Table 1--Specialties Excluded From Ratesetting Calculation
------------------------------------------------------------------------
         Specialty code                   Specialty description
------------------------------------------------------------------------
49.............................  Ambulatory surgical center.
50.............................  Nurse practitioner.
51.............................  Medical supply company with certified
                                  orthotist.
52.............................  Medical supply company with certified
                                  prosthetist.
53.............................  Medical supply company with certified
                                  prosthetist-orthotist.
54.............................  Medical supply company not included in
                                  51, 52, or 53.
55.............................  Individual certified orthotist.

[[Page 80178]]

 
56.............................  Individual certified prosthetist.
57.............................  Individual certified prosthetist-
                                  orthotist.
58.............................  Medical supply company with registered
                                  pharmacist.
59.............................  Ambulance service supplier, e.g.,
                                  private ambulance companies, funeral
                                  homes, etc.
60.............................  Public health or welfare agencies.
61.............................  Voluntary health or charitable
                                  agencies.
73.............................  Mass immunization roster biller.
74.............................  Radiation therapy centers.
87.............................  All other suppliers (e.g., drug and
                                  department stores).
88.............................  Unknown supplier/provider specialty.
89.............................  Certified clinical nurse specialist.
96.............................  Optician.
97.............................  Physician assistant.
A0.............................  Hospital.
A1.............................  SNF.
A2.............................  Intermediate care nursing facility.
A3.............................  Nursing facility, other.
A4.............................  HHA.
A5.............................  Pharmacy.
A6.............................  Medical supply company with respiratory
                                  therapist.
A7.............................  Department store.
B2.............................  Pedorthic personnel.
B3.............................  Medical supply company with pedorthic
                                  personnel.
------------------------------------------------------------------------

     Crosswalk certain low volume physician specialties: 
Crosswalk the utilization of certain specialties with relatively low 
PFS utilization to the associated specialties.
     Physical therapy utilization: Crosswalk the utilization 
associated with all physical therapy services to the specialty of 
physical therapy.
     Identify professional and technical services not 
identified under the usual TC and 26 modifiers: Flag the services that 
are PC and TC services but do not use TC and 26 modifiers (for example, 
electrocardiograms). This flag associates the PC and TC with the 
associated global code for use in creating the indirect PE RVUs. For 
example, the professional service, CPT code 93010 (Electrocardiogram, 
routine ECG with at least 12 leads; interpretation and report only), is 
associated with the global service, CPT code 93000 (Electrocardiogram, 
routine ECG with at least 12 leads; with interpretation and report).
     Payment modifiers: Payment modifiers are accounted for in 
the creation of the file consistent with current payment policy as 
implemented in claims processing. For example, services billed with the 
assistant at surgery modifier are paid 16 percent of the PFS amount for 
that service; therefore, the utilization file is modified to only 
account for 16 percent of any service that contains the assistant at 
surgery modifier. Similarly, for those services to which volume 
adjustments are made to account for the payment modifiers, time 
adjustments are applied as well. For time adjustments to surgical 
services, the intraoperative portion in the work time file is used; 
where it is not present, the intraoperative percentage from the payment 
files used by contractors to process Medicare claims is used instead. 
Where neither is available, we use the payment adjustment ratio to 
adjust the time accordingly. Table 2 details the manner in which the 
modifiers are applied.

                                             Table 2--Application of Payment Modifiers to Utilization Files
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Modifier                       Description              Volume adjustment                            Time adjustment
--------------------------------------------------------------------------------------------------------------------------------------------------------
80, 81, 82.........................  Assistant at Surgery......  16%.......................  Intraoperative portion.
AS.................................  Assistant at Surgery--      14% (85% * 16%)...........  Intraoperative portion.
                                      Physician Assistant.
50 or LT and RT....................  Bilateral Surgery.........  150%......................  150% of work time.
51.................................  Multiple Procedure........  50%.......................  Intraoperative portion.
52.................................  Reduced Services..........  50%.......................  50%.
53.................................  Discontinued Procedure....  50%.......................  50%.
54.................................  Intraoperative Care only..  Preoperative +              Preoperative + Intraoperative portion.
                                                                  Intraoperative
                                                                  Percentages on the
                                                                  payment files used by
                                                                  Medicare contractors to
                                                                  process Medicare claims.
55.................................  Postoperative Care only...  Postoperative Percentage    Postoperative portion.
                                                                  on the payment files used
                                                                  by Medicare contractors
                                                                  to process Medicare
                                                                  claims.
62.................................  Co-surgeons...............  62.5%.....................  50%.
66.................................  Team Surgeons.............  33%.......................  33%.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We also make adjustments to volume and time that correspond to 
other payment rules, including special multiple procedure endoscopy 
rules and multiple procedure payment reductions (MPPRs). We note that 
section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments 
for multiple imaging procedures and multiple therapy services from the 
BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These 
MPPRs are not included in the development of the RVUs.
    For anesthesia services, we do not apply adjustments to volume 
since we use the average allowed charge when simulating RVUs; 
therefore, the RVUs as calculated already reflect the payments as 
adjusted by modifiers, and no volume adjustments are necessary. 
However, a time adjustment of 33 percent is made only for medical 
direction of two to four cases since that is the only situation where a 
single practitioner is involved with multiple beneficiaries 
concurrently, so that counting each service without regard to the 
overlap with other services would overstate the amount of time spent by 
the practitioner furnishing these services.
     Work RVUs: The setup file contains the work RVUs from this 
final rule.
(6) Equipment Cost Per Minute
    The equipment cost per minute is calculated as:


[[Page 80179]]


(1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 + 
interest rate)[supcaret] life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage = 1); generally 150,000 minutes.
usage = variable, see discussion below.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below.

    Usage: We currently use an equipment utilization rate assumption of 
50 percent for most equipment, with the exception of expensive 
diagnostic imaging equipment, for which we use a 90 percent assumption 
as required by section 1848(b)(4)(C) of the Act.
    Stakeholders have often suggested that particular equipment items 
are used less frequently than 50 percent of the time in the typical 
setting and that CMS should reduce the equipment utilization rate based 
on these recommendations. We appreciate and share stakeholders' 
interest in using the most accurate assumption regarding the equipment 
utilization rate for particular equipment items. However, we believe 
that absent robust, objective, auditable data regarding the use of 
particular items, the 50 percent assumption is the most appropriate 
within the relative value system. We welcome the submission of data 
that illustrates an alternative rate.
    Maintenance: This factor for maintenance was finalized in the CY 
1998 PFS final rule (62 FR 33164).
    We continue to investigate potential avenues for determining 
equipment maintenance costs across a broad range of equipment items.
    Comment: One commenter stated that the cost of maintaining imaging 
equipment exceeds the cost of general medical equipment, and that for 
imaging modalities the median maintenance cost is approximately 10 
percent of the equipment purchase price. The commenter stated that the 
current 5 percent equipment maintenance rate continues to be an 
inadequate and outdated reflection of actual maintenance costs. The 
commenter also stated that information on maintenance costs is readily 
available to CMS through both public and private sources. The commenter 
did not identify these sources.
    Response: As we previously stated in the CY 2016 final rule with 
comment period (80 FR 70897), we agree with the commenter that we do 
not believe the annual maintenance factor for all equipment is exactly 
5 percent, and we concur that the current rate likely understates the 
true cost of maintaining some equipment. We also believe it likely 
overstates the maintenance costs for other equipment. When we solicited 
comments regarding sources of data containing equipment maintenance 
rates, commenters were unable to identify an auditable, robust data 
source that could be used by CMS on a wide scale. As a result, in the 
absence of publicly available datasets regarding equipment maintenance 
costs or another systematic data collection methodology for determining 
maintenance factor, we do not believe that we have sufficient 
information at present to adopt a variable maintenance factor for 
equipment cost per minute pricing. We continue to investigate potential 
avenues for determining equipment maintenance costs across a broad 
range of equipment items.
    Interest Rate: In the CY 2013 PFS final rule with comment period 
(77 FR 68902), we updated the interest rates used in developing an 
equipment cost per minute calculation. The interest rate was based on 
the Small Business Administration (SBA) maximum interest rates for 
different categories of loan size (equipment cost) and maturity (useful 
life). The interest rates are listed in Table 3. (See 77 FR 68902 for a 
thorough discussion of this issue.) We did not propose any changes to 
these interest rates for CY 2017.

                   Table 3--SBA Maximum Interest Rates
------------------------------------------------------------------------
                                                               Interest
               Price                       Useful life         rate (%)
------------------------------------------------------------------------
<$25K..............................  <7 Years..............         7.50
$25K to $50K.......................  <7 Years..............         6.50
>$50K..............................  <7 Years..............         5.50
<$25K..............................  7+ Years..............         8.00
$25K to $50K.......................  7+ Years..............         7.00
>$50K..............................  7+ Years..............         6.00
------------------------------------------------------------------------

d. Changes to Direct PE Inputs for Specific Services
    This section focuses on specific PE inputs. The direct PE inputs 
are included in the CY 2017 direct PE input database, which is 
available on our Web site under downloads for the CY 2017 PFS final 
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(1) PE Inputs for Digital Imaging Services
    Prior to the CY 2015 PFS rulemaking cycle, the RUC provided a 
recommendation regarding the PE inputs for digital imaging services. 
Specifically, the RUC recommended that we remove supply and equipment 
items associated with film technology from a previously specified list 
of codes since these items were no longer typical resource inputs. The 
RUC also recommended that the Picture Archiving and Communication 
System (PACS) equipment be included for these imaging services since 
these items are typically used in furnishing imaging services. However, 
since we did not receive any invoices for the PACS system prior to that 
year's proposed rule, we were unable to determine the appropriate 
pricing to use for the inputs. For CY 2015, we finalized our proposal 
to remove the film supply and equipment items, and to create a new 
equipment item as a proxy for the PACS workstation as a direct expense 
(79 FR 67561-67563). We used the price associated with ED021 (computer, 
desktop, w-monitor) to price the new item, ED050 (PACS Workstation 
Proxy), pending receipt of invoices to facilitate pricing specific to 
the PACS workstation. Subsequent to establishing payment rates for CY 
2015, we received information from several stakeholders regarding 
pricing for items related to the digital acquisition and storage of 
images. We received invoices from one stakeholder that facilitated a 
proposed price update for the PACS workstation in the CY 2016 PFS 
proposed rule, and we updated the price for the PACS workstation to 
$5,557 in the CY 2016 PFS final rule with comment period (80 FR 70899).
    In addition to the workstation used by the clinical staff for 
acquiring the images and furnishing the technical component (TC) of the 
services, a stakeholder also submitted more detailed information 
regarding a workstation used by the practitioner interpreting the image 
in furnishing the professional component (PC) of many of these 
services.
    As we stated in the CY 2015 PFS final rule with comment period (79 
FR 67563), we generally believe that workstations used by these 
practitioners are more accurately considered indirect costs associated 
with the PC of the service. However, we understand that the 
professional workstations for interpretation of digital images are 
similar in principle to some of the previous film inputs incorporated 
into the global and technical components of the codes, such as the view 
box equipment. Given that the majority of these services are reported 
globally in the nonfacility setting, we believe it is appropriate to 
include these costs as direct inputs for the associated HCPCS codes. 
Based on our established

[[Page 80180]]

methodology in which single codes with professional and technical 
components are constructed by assigning work RVUs exclusively to the 
professional component and direct PE inputs exclusively to the 
technical components, these costs would be incorporated into the PE 
RVUs of the global and technical component of the HCPCS code.
    We stated in the CY 2016 PFS final rule with comment period that 
the costs of the professional workstation may be analogous to costs 
related to the use of film previously incorporated as direct PE inputs 
for these services. We also solicited comments on whether including the 
professional workstation as a direct PE input for these codes would be 
appropriate, given that the resulting PE RVUs would be assigned to the 
global and technical components of the codes. Commenters responded by 
indicating their approval of the concept of a professional PACS 
workstation used for interpretation of digital images. We received 
invoices for the pricing of a professional PACS workstation, as well as 
additional invoices for the pricing of a mammography-specific version 
of the professional PACS workstation. The RUC also included these new 
equipment items in its recommendations for the CY 2017 PFS rulemaking 
cycle.
    Based on our analysis of submitted invoices, we proposed to price 
the professional PACS workstation (ED053) at $14,616.93. We did not 
propose a change in price for the current technical PACS workstation 
(ED050), which will remain at a price of $5,557.00.
    The price of the professional PACS workstation is based upon 
individual invoices submitted for the cost of a PC Tower ($1531.52), a 
pair of 3 MP monitors ($10,500.00 in total), a keyboard and mouse 
($84.95), a UPS power backup devices for TNP ($1098.00), and a switch 
for PACS monitors/workstations ($1402.46).
    We proposed to add the professional PACS workstation to many CPT 
codes in the 70000 series that use the current technical PACS 
workstation (ED050) and include professional work for which such a 
workstation would be used. We did not propose to add the equipment item 
to add-on codes since the base codes would include minutes for the 
item. We also did not propose to add the item to codes that are 
therapeutic in nature, as the professional PACS workstation is intended 
for use in diagnostic services. We therefore did not propose to add the 
item to codes in the Radiation Therapy section (77261 through 77799) or 
the Nuclear Medicine Cardiology section (78414-78499). We also did not 
propose to add the item to image guidance codes where the dominant 
provider is not a radiologist (77002, 77011, 77071, 77077, and 77081) 
according to the most recent year of claims data, since we believe a 
single workstation would be more typical in those cases. We identified 
approximately 426 codes to which we proposed to add a professional PACS 
workstation. Please see Table 4 for the full list of affected codes.
    For the professional PACS workstation, we proposed to assign 
equipment time equal to the intraservice work time plus half of the 
preservice work time associated with the codes, since the work time 
generally reflects the time associated with the professional 
interpretation. We proposed half of the preservice work time for the 
professional PACS workstation because we do not believe that the 
practitioner would typically spend all of the preservice work period 
using the equipment. For older codes that do not have a breakdown of 
physician work time by service period, and only have an overall 
physician work time, we proposed to use half the total work time as an 
approximation of the intraservice work time plus one half of the 
preservice work time. In our review of services that contained an 
existing PACS workstation and had a breakdown of physician work time, 
we found that half of the total time was a reasonable approximation for 
the value of intraservice work time plus one half of preservice work 
time where no such breakdown existed. We also considered using an 
equipment time formula of the physician intraservice time plus 1 minute 
(as a stand-in for the physician preservice work time). We solicited 
public comment on the most accurate equipment time formula for the 
professional PACS workstation.
    We solicited public comment on the proposed list of codes that 
would incorporate the professional PACS workstation. We were interested 
in public comment on the codes for which a professional PACS 
workstation should be included, and whether one of these professional 
workstations should be included for codes outside the 70000 series. In 
cases within the 70000 series where radiologists are not the typical 
specialty reporting the code, such as CPT codes 77002 and 77011, we 
asked whether it would be appropriate to add one of the professional 
PACS workstations to these services.
    The following is a summary of the comments we received on the 
proposed addition of the professional PACS workstation, the pricing of 
the workstation, the list of codes that would incorporate the 
professional PACS workstation, and the equipment minutes to assign to 
the workstation.
    Comment: Commenters supported the general concept of the 
professional PACS workstation and its addition to the proposed list of 
codes. Commenters stated that the professional PACS workstation is an 
essential component of diagnostic imaging procedures due to the switch 
from film to digital technology, and the professional workstation would 
be an appropriate inclusion as a direct PE input for these services.
    Response: We appreciate the support from the commenters for the 
addition of the professional PACS workstation.
    Comment: Many commenters addressed the subject of the proper 
pricing of the professional PACS workstation. Several commenters 
requested that CMS increase the price of the workstation to include a 
third and fourth monitor (for speech recognition) priced at $1,715.98, 
an Admin Monitor (the extra working monitor) priced at $279.27, and a 
Powerscribe Microphone priced at $424.00. Commenters stated that speech 
recognition equipment is typical for a professional PACS workstation, 
and that physicians typically employed a monitor with greater 
resolution than what would be typically used for other purposes (such 
as for electronic health records). Related comments contended that the 
proposed pricing of the workstation remained significantly less than 
what the average imaging facility spends on PACS technology. Other 
commenters disagreed with these sentiments and supported the pricing of 
the professional PACS workstation at the proposed rate of $14,616.93.
    Response: We appreciate the feedback from the commenters regarding 
the proper pricing of the professional PACS workstation. When proposing 
a price for the professional PACS workstation, we did not include the 
cost of the additional monitors and the Powerscribe microphone because 
these items represent indirect costs under the established PE 
methodology and the functionality would unlikely have been included in 
the previously existing film inputs the professional PACS workstation 
is replacing. Generally, we believe that monitors used to access 
electronic health records and microphones used for dictation are often 
used by practitioners who furnish a range a PFS services, are not 
allocable to particular services or patients, and therefore, are 
included in the administrative cost category of practice expense, and 
therefore, are allocated to

[[Page 80181]]

individual codes through indirect PE RVUs.
    Comment: Many commenters stated that CMS should expand the list of 
codes with a professional PACS workstation. Commenters generally 
focused on three of the criteria proposed by CMS: The exclusion of the 
workstation from add-on services, the exclusion of therapeutic (as 
opposed to diagnostic) services, and the exclusion of codes outside the 
70000 series. Commenters stated that add-on codes should be 
incorporated into the professional PACS workstation list, as they 
require additional time to perform, and therefore, more time with the 
technical PACS workstation for the technician, as well as additional 
time for the review and interpretation performed by the physician using 
the professional PACS workstation. Commenters also indicated that many 
therapeutic services would also require a professional PACS 
workstation, and disagreed with limiting the workstation to diagnostic 
services only. Finally, commenters supplied extensive lists of 
additional codes, both inside and outside of the 70000 series, where 
they stated that the inclusion of a professional PACS workstation was 
warranted.
    Response: We appreciate the feedback from the commenters in helping 
to define the criteria for inclusion of the professional PACS 
workstation, along with more specific recommendations about which codes 
should include the workstation. After considering these comments, we 
will be adding the professional PACS workstation to additional 
suggested codes. We took the following into account in making these 
additions:
     We did not add the professional PACS workstation to any 
code that currently lacks a technical PACS workstation (ED050) or lacks 
a work RVU. We continue to believe that procedures which do not include 
a technical workstation, or do not have physician work, would not 
require a professional workstation.
     We did not add the professional PACS workstation to add-on 
codes. Because the base codes include equipment minutes for the 
workstation, we continue to believe it would be duplicative to add 
additional equipment time for the professional PACS workstation in the 
add-on code.
     We agree with commenters that because the clinical utility 
of the PACS workstation is not necessarily limited to diagnostic 
services, there may be therapeutic codes where it would be reasonable 
to assume its use to be typical. We believe that in these specific 
cases, the use of the professional PACS workstation has been 
established to be typical for the code in question by the specialties 
furnishing the service, as a result of the evidence provided in the 
comments submitted in response to our proposal. We have added the 
workstation to many of the therapeutic codes requested by commenters, 
specifically codes listed outside the 70000 series, where use of the 
professional PACS station is typical.
     Within the 70000 series, we reviewed each of the codes 
submitted by commenters. Most of these codes did not fall within one of 
the categories where we proposed to add the professional PACS 
workstation in the proposed rule: They lacked a technical PACS 
workstation, they were add-on codes, or they were diagnostic procedures 
for which radiology is not the dominant specialty providing the 
service. We continue to believe that the professional PACS workstation 
should not be added to codes that do not fall into these categories, 
since we believe that the image must be captured in order to for it to 
be interpreted, that the use of the PACS workstation in the base code 
reported with add-on codes would accurately capture the associated 
resources used, and that the PACS professional workstation is only 
typically used by radiologists. Based on comments, we are adding the 
professional workstation to only one code in the 70000 series, CPT code 
73562, as it includes a technical PACS workstation, is not an add-on 
code, and is typically furnished by radiologists.
     For codes in the 80000 and 90000 series, we are concerned 
about whether it is appropriate to include the technical PACS 
workstation into many of these services. PACS workstations were created 
for imaging purposes, but many of these services that include a 
technical PACS workstation do not appear to make use of imaging. 
Although we are not removing the technical PACS workstation from these 
codes at this time, we do not believe that a professional PACS 
workstation should be added to these procedures. We will consider the 
inclusion of both PACS workstations for future rulemaking.
    Comment: Several commenters addressed the topic of equipment time 
for the professional PACS workstation. Commenters requested that CMS 
allocate the entire preservice physician work time associated with the 
codes, as opposed to the proposed half of the preservice physician work 
time. Commenters stated that although certain physician work activities 
in the preservice period may not directly involve the professional 
workstation, even when the physician is engaged in these parallel work 
activities, the professional workstation is ``open'' to the patient at 
hand and cannot be used for other patients. Commenters also disagreed 
with the proposal to use half the total time for older codes in which 
there is no separation of preservice and intraservice period times. 
Commenters stated that using the entire physician work time would be 
the best option since there is no accurate way to estimate the service 
period times, and that it would avoid potential confusion in equipment 
formulas in the future.
    Response: We continue to believe that the professional PACS 
workstation is more accurately assigned equipment time by using half of 
the preservice physician work time rather than the full preservice 
physician work time. As we stated in the proposed rule, we do not 
believe that the practitioner would typically spend all of the 
preservice work period using the equipment. Commenters agreed that the 
physician may not need the professional workstation for the full 
preservice period, but contended that the equipment would be ``open'' 
and unavailable for use by other physicians or for other patients. We 
disagree with this argument on clinical practice and methodological 
grounds. We do not agree that the professional PACS workstation would 
necessarily be unavailable for use by other physicians when the 
physician in question is not using the machine, Additionally, we note 
that the number of minutes assigned to the predecessor film inputs did 
not generally include the full number of pre-service minutes. Finally, 
our PE methodology is based on the resources typically used to furnish 
the procedure, and we typically assign time for equipment items based 
on when it cannot be used by another practitioner or for another 
patient due to its use in the given procedure. We continue to believe 
that half of the preservice physician work time (along with the full 
physician intraservice work time) is a good approximation of the time 
in the preservice period that the professional PACS workstation will 
typically be in use. As we stated in the proposed rule, we do not 
believe that the practitioner would typically spend all of the 
preservice time using the equipment, and would also spend preservice 
time on other activities, such as scrubbing and dressing, for example.
    For older codes where there is no breakdown of work time values by 
service period, we do not agree with commenters that the professional 
PACS workstation should use the total work time. The comments do not 
provide a

[[Page 80182]]

persuasive rationale for using the total work time instead of our 
proposed alternative, developed for consistency with codes for which we 
do have work time breakdowns by service period. Therefore, in the 
absence of service period work time detail, we continue to believe that 
half of the total work time is a reasonable proxy for the small number 
of old codes affected by this issue. We are not concerned about the 
potential for confusion in the future with differing equipment time 
formulas, as the addition of the professional PACS workstation to these 
codes is a one-time inclusion that will not affect the future review of 
this equipment.
    Finally, we believe that there is a difference in the pattern of 
equipment usage for the professional PACS workstation between 
diagnostic and therapeutic codes. Generally, the intraservice work for 
diagnostic imaging codes describes the review of images, while the 
intraservice work for therapeutic services describes a broader range of 
activities. Therefore, although we used an equipment formula of half 
the preservice physician work time and the full intraservice physician 
work time for the diagnostic procedures, we do not believe that this 
same time formula would be appropriate for therapeutic procedures since 
the professional PACS workstation would not be in use during the 
intraservice portion of these services. Therefore, we will use an 
equipment time formula of half the preservice physician work time and 
half the postservice physician work time for the therapeutic codes to 
which we are adding a professional PACS workstation, which we believe 
is more consistent with the descriptions of work for the codes in 
question. Consistent with our ongoing efforts to improve payment 
accuracy for these costs, we seek recommendations from the RUC and 
other stakeholders on a more precise allocation methodology for 
equipment minutes for these procedures.
    After consideration of comments received, we are finalizing our 
proposal to add a professional PACS workstation (ED053) to the 
equipment database and price it at the proposed rate of $14,616.93. We 
are dividing the codes that will contain a professional PACS 
workstation into diagnostic and therapeutic categories. For diagnostic 
codes, we are assigning equipment minutes equal to half the preservice 
physician work time and the full intraservice physician work time. For 
the relatively smaller group of diagnostic codes with no service period 
time breakdown, we are assigning equipment time equal to half of the 
total physician work time. For therapeutic codes, we are assigning 
equipment minutes equal to half the preservice physician work time and 
half the postservice physician work time for the second group. There 
are no therapeutic codes on our current list which lack a service 
period time breakdown. The following table lists all of the codes that 
include a professional PACS workstation for CY 2017, along with the 
equipment minutes for the workstation.

Table 4--Codes With Professional PACS Workstation in the Direct PE Input
                                Database
------------------------------------------------------------------------
                                                                ED053
            HCPCS                     Procedure type           Minutes
------------------------------------------------------------------------
10030........................  Therapeutic.................           23
10035........................  Therapeutic.................           15
19081........................  Therapeutic.................           19
19083........................  Therapeutic.................           17
19085........................  Therapeutic.................           19
19281........................  Therapeutic.................           18
19283........................  Therapeutic.................           19
19285........................  Therapeutic.................           18
19287........................  Therapeutic.................           19
22510........................  Therapeutic.................           32
22511........................  Therapeutic.................           32
22513........................  Therapeutic.................           32
22514........................  Therapeutic.................           32
32555........................  Therapeutic.................           19
32557........................  Therapeutic.................           19
36221........................  Therapeutic.................           34
36222........................  Therapeutic.................           34
36223........................  Therapeutic.................           34
36224........................  Therapeutic.................           34
36225........................  Therapeutic.................           34
36226........................  Therapeutic.................           34
36251........................  Therapeutic.................           31
36252........................  Therapeutic.................           31
36253........................  Therapeutic.................           31
36254........................  Therapeutic.................           31
36598........................  Therapeutic.................           13
37184........................  Therapeutic.................           30
37187........................  Therapeutic.................           25
37188........................  Therapeutic.................           23
37191........................  Therapeutic.................           22
37192........................  Therapeutic.................           23
37193........................  Therapeutic.................           23
37197........................  Therapeutic.................           26
37220........................  Therapeutic.................           34
37221........................  Therapeutic.................           34
37224........................  Therapeutic.................           34
37225........................  Therapeutic.................           34
37226........................  Therapeutic.................           34
37227........................  Therapeutic.................           34
37228........................  Therapeutic.................           34
37229........................  Therapeutic.................           34
37230........................  Therapeutic.................           34
37231........................  Therapeutic.................           34
37236........................  Therapeutic.................           31
37238........................  Therapeutic.................           31
37241........................  Therapeutic.................           26
37242........................  Therapeutic.................           31
37243........................  Therapeutic.................           38
37244........................  Therapeutic.................           38
47531........................  Therapeutic.................           20
47532........................  Therapeutic.................           22
47533........................  Therapeutic.................           26
47534........................  Therapeutic.................           26
47535........................  Therapeutic.................           19
47536........................  Therapeutic.................           16
47537........................  Therapeutic.................           19
47538........................  Therapeutic.................           22
47539........................  Therapeutic.................           26
47540........................  Therapeutic.................           26
47541........................  Therapeutic.................           26
49083........................  Therapeutic.................           18
49405........................  Therapeutic.................           28
49406........................  Therapeutic.................           28
49407........................  Therapeutic.................           28
49418........................  Therapeutic.................           27
49440........................  Therapeutic.................           29
49441........................  Therapeutic.................           29
49442........................  Therapeutic.................           29
49446........................  Therapeutic.................           22
49450........................  Therapeutic.................           20
49451........................  Therapeutic.................           20
49452........................  Therapeutic.................           20
49460........................  Therapeutic.................           20
49465........................  Therapeutic.................           13
50382........................  Therapeutic.................           28
50384........................  Therapeutic.................           24
50385........................  Therapeutic.................           27
50386........................  Therapeutic.................           25
50387........................  Therapeutic.................           22
50389........................  Therapeutic.................           15
50430........................  Therapeutic.................           23
50431........................  Therapeutic.................           20
50432........................  Therapeutic.................           25
50433........................  Therapeutic.................           25
50434........................  Therapeutic.................           23
50435........................  Therapeutic.................           18
50693........................  Therapeutic.................           25
50694........................  Therapeutic.................           25
50695........................  Therapeutic.................           25
58340........................  Therapeutic.................            7
62302........................  Therapeutic.................           17
62303........................  Therapeutic.................           17
62304........................  Therapeutic.................           17
62305........................  Therapeutic.................           18
70015........................  Diagnostic..................           12
70030........................  Diagnostic..................            3
70100........................  Diagnostic..................            3
70110........................  Diagnostic..................            4
70120........................  Diagnostic..................            3
70130........................  Diagnostic..................            4
70134........................  Diagnostic..................            4
70140........................  Diagnostic..................            3
70150........................  Diagnostic..................            4
70160........................  Diagnostic..................            3
70190........................  Diagnostic..................            3
70200........................  Diagnostic..................            4
70210........................  Diagnostic..................            3
70220........................  Diagnostic..................            4
70240........................  Diagnostic..................            3
70250........................  Diagnostic..................            4
70260........................  Diagnostic..................            7
70300........................  Diagnostic..................            2
70310........................  Diagnostic..................            3
70320........................  Diagnostic..................            3
70328........................  Diagnostic..................            3
70330........................  Diagnostic..................           22
70332........................  Diagnostic..................            6
70336........................  Diagnostic..................           20
70350........................  Diagnostic..................            3
70355........................  Diagnostic..................            5
70360........................  Diagnostic..................            3
70370........................  Diagnostic..................            4
70371........................  Diagnostic..................            9

[[Page 80183]]

 
70380........................  Diagnostic..................            3
70390........................  Diagnostic..................            5
70450........................  Diagnostic..................           12
70460........................  Diagnostic..................           15
70470........................  Diagnostic..................           18
70480........................  Diagnostic..................           13
70481........................  Diagnostic..................           13
70482........................  Diagnostic..................           14
70490........................  Diagnostic..................           13
70491........................  Diagnostic..................           13
70492........................  Diagnostic..................           14
70540........................  Diagnostic..................           14
70542........................  Diagnostic..................           19
70543........................  Diagnostic..................           19
70544........................  Diagnostic..................           13
70545........................  Diagnostic..................           18
70546........................  Diagnostic..................           18
70547........................  Diagnostic..................           13
70548........................  Diagnostic..................           20
70549........................  Diagnostic..................           25
70551........................  Diagnostic..................           21
70552........................  Diagnostic..................           23
70553........................  Diagnostic..................           28
70554........................  Diagnostic..................           43
71010........................  Diagnostic..................            4
71015........................  Diagnostic..................            3
71020........................  Diagnostic..................            4
71021........................  Diagnostic..................            4
71022........................  Diagnostic..................            4
71023........................  Diagnostic..................            5
71030........................  Diagnostic..................            4
71034........................  Diagnostic..................            5
71035........................  Diagnostic..................            3
71100........................  Diagnostic..................            5
71101........................  Diagnostic..................            4
71110........................  Diagnostic..................            4
71111........................  Diagnostic..................            5
71120........................  Diagnostic..................            3
71130........................  Diagnostic..................            3
71250........................  Diagnostic..................           18
71260........................  Diagnostic..................           17
71270........................  Diagnostic..................           13
71275........................  Diagnostic..................           28
71550........................  Diagnostic..................           15
71551........................  Diagnostic..................           30
71552........................  Diagnostic..................           28
71555........................  Diagnostic..................           33
72020........................  Diagnostic..................            3
72040........................  Diagnostic..................            4
72050........................  Diagnostic..................            6
72052........................  Diagnostic..................            6
72070........................  Diagnostic..................            4
72072........................  Diagnostic..................            3
72074........................  Diagnostic..................            3
72080........................  Diagnostic..................            3
72081........................  Diagnostic..................            6
72082........................  Diagnostic..................            7
72083........................  Diagnostic..................            8
72084........................  Diagnostic..................            9
72100........................  Diagnostic..................            4
72110........................  Diagnostic..................            6
72114........................  Diagnostic..................            6
72120........................  Diagnostic..................            4
72125........................  Diagnostic..................           18
72126........................  Diagnostic..................           12
72127........................  Diagnostic..................           12
72128........................  Diagnostic..................           18
72129........................  Diagnostic..................           12
72130........................  Diagnostic..................           12
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------------------------------------------------------------------------

(2) Standardization of Clinical Labor Tasks
    As we noted in the CY 2015 PFS final rule (79 FR 67640-67641), we 
continue to make improvements to the direct PE input database to 
provide the number of clinical labor minutes assigned for each task for 
every code in the database instead of only including the number of

[[Page 80185]]

clinical labor minutes for the preservice, service, and postservice 
periods for each code. In addition to increasing the transparency of 
the information used to set PE RVUs, this improvement would allow us to 
compare clinical labor times for activities associated with services 
across the PFS, which we believe is important to maintaining the 
relativity of the direct PE inputs. This information would facilitate 
the identification of the usual numbers of minutes for clinical labor 
tasks and the identification of exceptions to the usual values. It 
would also allow for greater transparency and consistency in the 
assignment of equipment minutes based on clinical labor times. Finally, 
we believe that the information can be useful in maintaining standard 
times for particular clinical labor tasks that can be applied 
consistently to many codes as they are valued over several years, 
similar in principle to the use of physician preservice time packages. 
We believe such standards would provide greater consistency among codes 
that share the same clinical labor tasks and could improve relativity 
of values among codes. For example, as medical practice and 
technologies change over time, changes in the standards could be 
updated simultaneously for all codes with the applicable clinical labor 
tasks, instead of waiting for individual codes to be reviewed.
    In the following paragraphs, we address a series of issues related 
to clinical labor tasks, particularly relevant to services currently 
being reviewed under the misvalued code initiative.
(a) Clinical Labor Tasks Associated With Digital Imaging
    In CY 2015 PFS rulemaking, we noted that the RUC recommendation 
regarding inputs for digital imaging services indicated that, as each 
code is reviewed under the misvalued code initiative, the clinical 
labor tasks associated with digital technology (instead of film) would 
need to be addressed. When we reviewed that recommendation, we did not 
have the capability of assigning standard clinical labor times for the 
hundreds of individual codes since the direct PE input database did not 
previously allow for comprehensive adjustments for clinical labor times 
based on particular clinical labor tasks. Therefore, consistent with 
the recommendation, we proposed to remove film-based supply and 
equipment items but maintain clinical labor minutes that were assigned 
based on film technology.
    As noted in the paragraphs above, we continue to improve the direct 
PE input database by specifying for each code the minutes associated 
with each clinical labor task. Once completed, this work would allow 
adjustments to be made to minutes assigned to particular clinical labor 
tasks related to digital technology that occur in multiple codes, 
consistent with the changes that were made to individual supply and 
equipment items. In the meantime, we believe it would be appropriate to 
establish standard times for clinical labor tasks associated with all 
digital imaging services for purposes of reviewing individual services 
at present, and for possible broad-based standardization once the 
changes to the direct PE input database facilitate our ability to 
adjust time across services. During the CY 2016 PFS rulemaking cycle, 
we proposed appropriate standard minutes for five different clinical 
labor tasks associated with services that use digital imaging 
technology. In the CY 2016 PFS final rule with comment period (80 FR 
70901), we finalized appropriate standard minutes for four of those 
five activities, which are listed in Table 5.

Table 5--Clinical Labor Tasks Associated With Digital Imaging Technology
------------------------------------------------------------------------
                                                              Typical
                   Clinical labor task                        minutes
------------------------------------------------------------------------
Availability of prior images confirmed..................               2
Patient clinical information and questionnaire reviewed                2
 by technologist, order from physician confirmed and
 exam protocoled by radiologist.........................
Review examination with interpreting MD.................               2
Exam documents scanned into PACS. Exam completed in RIS                1
 system to generate billing process and to populate
 images into Radiologist work queue.....................
------------------------------------------------------------------------

    We did not finalize standard minutes for the activity 
``Technologist QC's images in PACS, checking for all images, reformats, 
and dose page.'' We agreed with commenters that this task may require a 
variable length of time depending on the number of images to be 
reviewed. We stated that it may be appropriate to establish several 
different standard times for this clinical labor task for a low/medium/
high quantity of images to be reviewed, in the same fashion that the 
clinical labor assigned to clean a surgical instrument package has two 
different standard times depending on the use of a basic pack (10 
minutes) or a medium pack (30 minutes). We solicited public comment and 
feedback on this subject, with the anticipation of including a proposal 
in the CY 2017 proposed rule.
    We received many comments suggesting that this clinical labor 
activity should not have a standard time value. Commenters stated that 
the number of minutes varies significantly for different imaging 
modalities; and the time is not simply based on the quantity of images 
to be reviewed, but also the complexity of the images. The commenters 
recommended that time for this clinical labor activity should be 
assigned on a code by code basis. We agree with the commenters that the 
amount of clinical labor needed to check images in a PACS workstation 
may vary depending on the service. However, we do not believe that this 
precludes the possibility of establishing standards for clinical labor 
tasks as we have done in the past by creating multiple standard times, 
for example, those assigned to cleaning different kinds of scopes. We 
continue to believe that the use of clinical labor standards provides 
greater consistency among codes that share the same clinical labor 
tasks and can improve relativity of values among codes. We proposed to 
establish a range of appropriate standard minutes for the clinical 
labor activity, ``Technologist QCs images in PACS, checking for all 
images, reformats, and dose page.'' These standard minutes will be 
applied to new and revised codes that make use of this clinical labor 
activity when they are reviewed by us for valuation. We proposed 2 
minutes as the standard for the simple case, 3 minutes as the standard 
for the intermediate case, and 4 minutes as the standard for the 
complex case. We proposed the simple case of 2 minutes as the standard 
for the typical procedure code involving routine use of imaging. These 
values are based upon a review of the existing minutes assigned for 
this clinical labor activity; we have determined that 2 minutes is the

[[Page 80186]]

duration for most services and a small number of codes with more 
complex forms of digital imaging have higher values. We proposed to use 
2 minutes for services involving routine X-rays (simple), 3 minutes for 
services involving CTs and MRIs (intermediate), and 4 minutes for the 
most highly complex services, which would exceed these more typical 
cases. We solicited comments regarding the most accurate category--
simple, intermediate, or complex for existing codes, and in particular 
what criteria might be used to identify complex cases systematically.
    The following is summary of the comments we received regarding the 
ongoing standardization of clinical labor tasks, and our specific 
proposal regarding the clinical labor task, ``Technologist QCs images 
in PACS, checking for all images, reformats, and dose page.''
    Comment: Many commenters restated their opposition to the principle 
of establishing standard values for clinical labor tasks. Commenters 
contended that clinical labor tasks were highly variable across 
different specialties, that the standardization process would disrupt 
the relativity of direct PE inputs across the PFS, and that the 
proposed standard times were too low and underestimated the staffing 
time needed to carry out the tasks in question. Commenters stressed 
that each code should be evaluated on an individual basis. One 
commenter expressed support for the overall concept regarding efforts 
to streamline the time for clinical labor activities.
    Response: We note the objections raised by the commenters to the 
process of standardizing time values for clinical labor tasks. However, 
as we have stated previously, we believe the establishment of standards 
can provide greater consistency among codes that share the same 
clinical labor tasks, as well as improve relativity of values among 
codes. We also note that we do evaluate each code on an individual 
basis for direct PE inputs, and establishing clinical labor standards 
assists in that process of individual review. We continue to allow 
clinical labor times above the standard values for individual services, 
provided that there is a compelling rationale to explain why that 
particular service requires additional clinical labor time above and 
beyond the standard. We believe that establishing a range of standard 
minutes for this particular digital imaging clinical labor task will 
provide clarity and help maintain relativity across a wide range of 
imaging services.
    Comment: One commenter requested a broad study of the actual 
clinical labor times associated with digital imaging.
    Response: We appreciate the importance of incorporating robust, 
auditable, and routinely updated data sources for use in the 
determination of RVUs. We welcome stakeholder information on the 
availability of such data, while we continue to consider the best means 
of acquiring such data.
    Comment: Several commenters addressed our specific proposal for the 
clinical labor task, ``Technologist QCs images in PACS, checking for 
all images, reformats, and dose page.'' Commenters requested that, 
short of no standard times at all, the establishment of categories for 
this clinical labor task should be as follows: Simple (2 min); 
intermediate (3 min), complex (4 min) and highly complex (5 min).
    Response: We appreciate the suggestion from the commenters to adopt 
a categorization system very similar to our proposal, with the addition 
of an extra category for highly complex services valued at 5 minutes. 
We agree with this addition to our proposal, as it will allow for 
additional specificity in classifying different types of imaging 
services, including those that are unusually complex. However, we note 
that we proposed to define the simple case of 2 minutes as the standard 
for the typical procedure code involving routine use of imaging, and we 
believe only a small number of codes with more complex forms of digital 
imaging would typically involve more time for the task. We proposed to 
use 2 minutes for services involving routine X-rays (the simple case), 
and 3 minutes for services involving CTs and MRIs (the intermediate 
case). We seek recommendations from the RUC and other stakeholders and 
we intend to request feedback from commenters through future rulemaking 
to assist in identifying what we believe would be the small number of 
services that fall into the complex (4 min) and highly complex (5 min) 
categories, and the specific basis used to set the two categories apart 
from one another. In the meantime, we will consider individual codes on 
a case by case basis for this clinical labor task.
    After considering the comments received, we are finalizing a range 
of appropriate standard minutes for the clinical labor activity, 
``Technologist QCs images in PACS, checking for all images, reformats, 
and dose page'' as follows: Simple (2 min); intermediate (3 min), 
complex (4 min) and highly complex (5 min). We are also finalizing our 
criteria for determining the simple and intermediate categories as 
proposed.
(b) Pathology Clinical Labor Tasks
    As with the clinical labor tasks associated with digital imaging, 
many of the currently assigned times for the specialized clinical labor 
tasks associated with pathology services are not consistent across 
codes. In reviewing past RUC recommendations for pathology services, we 
have not identified information that supports the judgment that the 
same tasks take significantly more or less time depending on the 
individual service for which they are performed, especially given the 
high degree of specificity with which the tasks are described. We 
continue to believe that, in general, a clinical labor task will tend 
to take the same amount of time to perform for one individual service 
as the same clinical labor task when it is performed in a clinically 
similar service.
    Therefore, we developed standard times for clinical labor tasks 
that we have used in finalizing direct PE inputs in recent years, 
starting in the CY 2012 PFS final rule with comment period (76 FR 
73213). These times were based on our review and assessment of the 
current times included for these clinical labor tasks in the direct PE 
input database. We proposed in the CY 2016 PFS proposed rule to 
establish standard times for a list of 17 clinical labor tasks related 
to pathology services, and solicited public feedback regarding our 
proposed standards. Many commenters stated in response to our proposal 
that they did not support the standardization of clinical labor 
activities across pathology services. Commenters stated that 
establishing a single standard time for each clinical labor task was 
infeasible due to the differences in batch size or number of blocks 
across different pathology procedures. Several commenters indicated 
that it might be possible to standardize across codes with the same 
batch sizes, and urged us to consider pathology-specific details, such 
as batch size and block number, in the creation of any future standard 
times for clinical labor tasks related to pathology services.
    As we stated in the CY 2016 PFS proposed rule, we developed the 
proposed standard times based on our review and assessment of the 
current times included for these clinical labor tasks in the direct PE 
input database. We believe that, generally speaking, clinical labor 
tasks with the same description are comparable across different 
pathology procedures. We believe this to be true based on the 
comparability of clinical labor tasks in

[[Page 80187]]

non-pathology services, as well as the high degree of specificity with 
which most clinical labor tasks for pathology services are described 
relative to clinical labor tasks associated with other PFS services. We 
concurred with commenters that accurate clinical labor times for 
pathology codes may be dependent on the number of blocks or batch size 
typically used for each individual service. However, we also believe 
that it is appropriate and feasible to establish ``per block'' 
standards or standards varied by batch size assumptions for many 
clinical labor activities that would be comparable across a wide range 
of individual services. We have received detailed information regarding 
batch size and number of blocks during review of individual pathology 
services on an intermittent basis in the past. We requested regular 
submission of these details on the PE worksheets supplied by the RUC as 
part of the review process for pathology services, as a means to assist 
in the determination of the most accurate direct PE inputs.
    We also stated our belief that many of the clinical labor 
activities for which we proposed to establish standard times were tasks 
that do not depend on number of blocks or batch size. Clinical labor 
activities such as ``Clean room/equipment following procedure'' and 
``Dispose of remaining specimens'' would typically remain standard 
across different services without varying by block number or batch 
size, with the understanding that additional time may be required above 
the standard value for a clinical labor task that is part of an 
unusually complex or difficult service. As a result, we ultimately 
finalized standard times for 6 of the 17 proposed clinical labor 
activities in the CY 2016 final rule with comment period (80 FR 70902). 
We have listed the finalized standard times in Table 6. We are taking 
no further action on the remaining 11 clinical labor activities in this 
final rule, pending further action by the RUC (see below).

    Table 6--Standard Times for Clinical Labor Tasks Associated With
                           Pathology Services
------------------------------------------------------------------------
                                                            Standard
                  Clinical labor task                    clinical labor
                                                         time  (minutes)
------------------------------------------------------------------------
Accession specimen/prepare for examination............                 4
Assemble and deliver slides with paperwork to                        0.5
 pathologists.........................................
Assemble other light microscopy slides, open nerve                   0.5
 biopsy slides, and clinical history, and present to
 pathologist to prepare clinical pathologic
 interpretation.......................................
Clean room/equipment following procedure (including                    1
 any equipment maintenance that must be done after the
 procedure)...........................................
Dispose of remaining specimens, spent chemicals/other                  1
 consumables, and hazardous waste.....................
Prepare, pack and transport specimens and records for                  1
 in-house storage and external storage (where
 applicable)..........................................
------------------------------------------------------------------------

    We remain committed to the process of establishing standard 
clinical labor times for tasks associated with pathology services. This 
may include establishing standards on a per-block or per-batch basis, 
as we indicated during the previous rulemaking cycle. However, we are 
aware that the PE Subcommittee of the RUC is currently working to 
standardize the pathology clinical labor activities they use in making 
their recommendations. We believe the RUC's efforts to narrow the 
current list of several hundred pathology clinical labor tasks to a 
more manageable number through the consolidation of duplicative or 
highly similar activities into a single description may serve PFS 
relativity and facilitate greater transparency in PFS ratesetting. We 
also believe that the RUC's standardization of pathology clinical labor 
tasks would facilitate our capacity to establish standard times for 
pathology clinical labor tasks in future rulemaking. Therefore, we did 
not propose any additional changes to clinical labor tasks associated 
with pathology services.
(3) Equipment Recommendations for Scope Systems
    During our routine reviews of direct PE input recommendations, we 
have regularly found unexplained inconsistencies involving the use of 
scopes and the video systems associated with them. Some of the scopes 
include video systems bundled into the equipment item, some of them 
include scope accessories as part of their price, and some of them are 
standalone scopes with no other equipment included. It is not always 
clear which equipment items related to scopes fall into which of these 
categories. We have also frequently found anomalies in the equipment 
recommendations, with equipment items that consist of a scope and video 
system bundle recommended, along with a separate scope video system. 
Based on our review, the variations do not appear to be consistent with 
the different code descriptions.
    To promote appropriate relativity among the services and facilitate 
the transparency of our review process, during review of recommended 
direct PE inputs for the CY 2017 PFS proposed rule, we developed a 
structure that separates the scope and the associated video system as 
distinct equipment items for each code. Under this approach, we 
proposed standalone prices for each scope, and separate prices for the 
video systems that are used with scopes. We would define the scope 
video system as including: (1) A monitor; (2) a processor; (3) a form 
of digital capture; (4) a cart; and (5) a printer. We believe that 
these equipment components represent the typical case for a scope video 
system. Our model for this system is the ``video system, endoscopy 
(processor, digital capture, monitor, printer, cart)'' equipment item 
(ES031), which we proposed to re-price as part of this separate pricing 
approach. We obtained current pricing invoices for the endoscopy video 
system as part of our investigation of these issues involving scopes, 
which we proposed to use for this re-pricing. We understand that there 
may be other accessories associated with the use of scopes; we proposed 
to separately price any scope accessories, and individually evaluate 
their inclusion or exclusion as direct PE inputs for particular codes 
as usual under our current policy based on whether they are typically 
used in furnishing the services described by the particular codes.
    We also proposed standardizing refinements to the way scopes have 
been defined in the direct PE input database. We believe that there are 
four general types of scopes: Non-video scopes; flexible scopes; semi-
rigid scopes, and rigid scopes. Flexible scopes, semi-rigid scopes, and 
rigid scopes would typically be paired with one of the video scope 
systems, while the non-video scopes would not. The

[[Page 80188]]

flexible scopes can be further divided into diagnostic (or non-
channeled) and therapeutic (or channeled) scopes. We proposed to 
identify for each anatomical application: (1) A rigid scope; (2) a 
semi-rigid scope; (3) a non-video flexible scope; (4) a non-channeled 
flexible video scope; and (5) a channeled flexible video scope. We 
proposed to classify the existing scopes in our direct PE database 
under this classification system, to improve the transparency of our 
review process and improve appropriate relativity among the services. 
We plan to propose input prices for these equipment items through 
future rulemaking.
    We proposed these changes only for the reviewed codes that make use 
of scopes; this applies to the codes in the Flexible Laryngoscope 
family (CPT codes 31572, 31573, 31574, 31575, 31576, 31577, 31578, 
31579) (see section II.L) and the Laryngoplasty family (CPT codes 
31551, 31552, 31553, 31554, 31580, 31584, 31587, 31591, 31592) (see 
section II.L) along with updated prices for the equipment items related 
to scopes utilized by these services. We also solicited comment on this 
separate pricing structure for scopes, scope video systems, and scope 
accessories, which we could consider proposing to apply to other codes 
in future rulemaking.
    The following is a summary of the comments we received on this 
separate pricing structure for scopes, scope video systems, and scope 
accessories.
    Comment: Many commenters addressed our general proposal to 
reclassify scopes and their related equipment items. Commenters 
expressed their support for the decision to remove the scopes from the 
proposed scope packages, and the proposed definition of the scope video 
system based on the current endoscopy video system equipment item 
(ES031). There were no comments opposing the general principle behind 
reclassifying scopes and scope equipment.
    Response: We appreciate the support from the commenters for the 
broad project to clarify these issues related to scopes.
    Comment: Many commenters also requested that CMS delay implementing 
the scope proposal until additional time could be devoted to the 
subject. Several commenters asked CMS to wait to make any changes until 
the RUC could form a PE Subcommittee to address this issue. For codes 
with proposed CY 2017 values, commenters urged CMS to adopt the RUC-
recommended direct PE inputs instead of the proposed direct PE inputs, 
pending anticipated RUC recommendations on the subject. Another 
commenter requested that CMS make no change for CY 2017 for any 
endoscopy procedures until proper identification of the capital and 
disposable cost inputs could be confirmed.
    Response: We appreciate commenters' interests in making certain 
that there is appropriate opportunity for stakeholders to provide 
feedback and recommendations on the reclassification of scopes and 
related scope equipment. This was our primary rationale for limiting 
proposed changes regarding these kinds of inputs to codes reviewed for 
the current CY 2017 rule cycle, that is, the Flexible Laryngoscope and 
Laryngoplasty families of codes. Because these codes are under current 
review; however, we believe that they should be valued according to a 
scheme that accurately describes the scope equipment typically used in 
the services. As a result, we continue to believe that our proposed 
classification system for scopes is the more sound methodology to use 
for valuation of these two families of codes for CY 2017. However, we 
note that we would expect to include examination of these codes as part 
of any broader proposal we would make regarding scope equipment items, 
in response to new recommendations on the subject.
    We look forward to receiving recommendations from the upcoming RUC 
PE Subcommittee regarding scopes and related scope equipment items. We 
note that in order for these recommendations to be considered for CY 
2018 rulemaking, we would need to receive these recommendations by the 
same February deadline for the submission of recommendations on code 
valuations.
    Comment: Many commenters disagreed with the CMS proposal to price 
the endoscopy video system (ES031) at a price of $15,045.00. Some 
commenters stated that CMS should use the submitted invoices for the 
pricing of this equipment, which recommended a price of $49,400.00. One 
commenter stated that the proposed amount did not accurately reflect 
the current price of GI endoscopy video systems. Another commenter 
stated that CMS had defined the endoscopy video system as containing 
five items: (1) A monitor; (2) a processor; (3) a form of digital 
capture; (4) a cart; and (5) a printer. However, the commenter pointed 
out that CMS had not included a price for the digital capture device, 
which the commenter stressed was a significant part of the overall cost 
and needed to be included in the equipment's pricing. The commenter 
submitted a series of new invoices for endoscopy video system and 
requested that CMS incorporate them into the pricing of the equipment.
    Response: We appreciate the feedback from the commenters about 
pricing, especially the submission of new data in the form of 
additional invoices. We agree that the cost of a digital capture device 
should be included in the cost of the endoscopy video system; it was 
our belief that the digital capture device was included in the cost of 
the processor. We appreciate the clarification from the commenters 
indicating that this is not the case, and that the digital capture 
device is a separately priced component of the video system. As a 
result, we are averaging the price of the digital capture device on the 
two submitted invoices and pricing it at $18,346.00. We will add this 
into the overall cost of the endoscopy video system.
    For the other four components of the video system, we are 
finalizing the prices as proposed. The invoices submitted for these 
components indicate that they are different forms of equipment with 
different product IDs and different prices. For example, our price for 
the processor comes from a ``Video Processor with keyboard & video 
cable'' (CV-180) as opposed to the newly submitted invoice for a 
``Viscera Elite Video System'' (OTV-S190). These are two distinct 
equipment items, and we do not have any data to indicate that the 
equipment on the newly submitted invoices is more typical in its use 
than the equipment that we are currently using to price the endoscopy 
video system.
    Therefore, we are finalizing the price of the endoscopy video 
system at $33,391.00, based on component prices of $9,000.00 for the 
processor, $18,346.00 for the digital capture device, $2,000.00 for the 
monitor, $2,295.00 for the printer, and $1,750.00 for the cart.
    Comment: A few commenters also addressed the pricing of related 
scope accessories. They stated that the proposed price for the 
fiberscope, flexible, rhinolaryngoscopy (ES020) was decreased by 33 
percent based on one unrepresentative invoice and that this price 
undervalued the actual cost. Similarly, commenters stated that the 
proposed price for the stroboscopy system (ES065) at $19,100 was much 
lower than the manufacturer average invoice pricing. The proposed 
prices for the channeled and non-channeled flexible video 
rhinolaryngoscopes (ES064 and ES063 respectively) were also both two to 
three times lower than the manufacturer's average invoice price. One 
commenter submitted additional invoices for pricing these scopes and 
scope accessories.

[[Page 80189]]

    Response: We appreciate the submission of this additional pricing 
data for review. Although many commenters stated that the price of the 
stroboscopy system was too low, only one commenter supplied additional 
invoices for the same equipment item that we defined in the proposed 
rule, the StrobeLED system, and these invoices reflected lower prices 
than the one we had proposed. These invoices reflected prices of 
$16,431.00 and $15,000.00. We are averaging these together with our 
previously submitted price of $19,100.00 for the stroboscopy system, 
which results in a new price of $16,843.87.
    When we reviewed the invoices for the channeled and non-channeled 
flexible video rhinolaryngoscopes (ES064 and ES063 respectively), we 
found that the product numbers indicated that these were different 
equipment items than the scopes that we priced in the proposed rule. As 
we mentioned for the pricing of the endoscopy video system, we have no 
data to indicate that use of these particular rhinolaryngoscopes would 
be typical, as opposed to the rhinolaryngoscopes that we proposed to 
use to establish prices in the proposed rule. As a result, we are 
maintaining our current prices for these scopes pending the submission 
of additional information.
    We similarly found that the invoices with recommended price 
increases for the endoscope, rigid, sinoscopy (ES013) from the current 
price of $2,414.17 to $4,024.00 and for the videoscope, colonoscopy 
(ES033) from $23,650.00 to $37,273.00 related to different equipment 
items that we do not believe are a better reflection of the typical 
case than the item we currently use. We did not propose to make price 
changes for these scopes, and we have not incorporated these equipment 
items into the new scope classification system. As we stated 
previously, we are currently limiting the scope changes to the CPT 
codes under review for CY 2017 and their associated equipment items. We 
will consider pricing changes for the rest of the scopes and associated 
scope equipment as part of the broader scope reclassification and 
pricing effort in future rulemaking.
    We received invoices for a series of equipment items listed as 
``other capital inputs not included in CMS estimate'' as part of this 
collection of invoices. Since these equipment items were not included 
in the original recommendations or our proposed valuations for the 
Flexible Laryngoscope and Laryngoplasty families of codes, we are not 
adding them to our equipment database at this time. We will consider 
the addition of these equipment items as part of the broader 
recommendations from the RUC PE Subcommittee on the scope 
classification project.
    We did not receive an invoice or other data to support a change in 
the pricing of the fiberscope, flexible, rhinolaryngoscopy (ES020).
    Comment: Many commenters objected to the use of a vendor quote for 
pricing of the scope equipment. Commenters requested that specialty 
societies should also be allowed to submit quotes for pricing as they 
are easier to obtain than paid invoices. Commenters also stated that 
the use of vendor prices created transparency issues and asked CMS to 
explain why they are appropriate to use rather than invoices supplied 
by specialties. One commenter stated that a single invoice was not an 
adequate sample to use as a pricing input for many types of endoscopic 
equipment.
    Response: We are always interested in investigating multiple data 
sources for use in pricing supplies and equipment, provided that the 
information can be verified as accurate. We agree with the commenter 
that a single voluntarily submitted invoice may not be an adequate 
source for making wide ranging pricing decisions. We prefer to have 
pricing information from multiple data sources whenever possible, which 
may include information obtained from vendors of medical supplies and 
equipment. We continue to believe that there are risks of bias in 
submission of price quotes used for purposes of ratesetting. However, 
given the way we use these prices in the current ratesetting 
methodologies, we believe the risk of bias is located in submission of 
overstated, not understated prices. Therefore, we believe it is 
reasonable to assume that practitioners would generally be able acquire 
particular items at the prices vendors submit to CMS.
    After consideration of comments received, we are finalizing our 
proposals as detailed in the proposed rule, with the updated prices for 
the endoscopy video system and the stroboscopy system.
(4) Technical Corrections to Direct PE Input Database and Supporting 
Files
    Subsequent to the publication of the CY 2016 PFS final rule with 
comment period, stakeholders alerted us to several clerical 
inconsistencies in the direct PE database. We proposed to correct these 
inconsistencies as described below and reflected in the CY 2017 direct 
PE input database displayed on our Web site under downloads for the CY 
2017 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For CY 2017, we proposed the following technical corrections:
     For CPT codes 72081-72084, a stakeholder informed us that 
the equipment time for the PACS workstation (ED050) should be equal to 
the clinical labor during the service period; the equipment time 
formula we used for these codes for CY 2016 erroneously included 4 
minutes of preservice clinical labor. We agree with the stakeholder 
that the PACS workstation should use the standard equipment time 
formula for a PACS workstation for these codes. As a result, we 
proposed to refine the ED050 equipment time to 21 minutes for CPT code 
72081, 36 minutes for CPT code 72082, 44 minutes for CPT code 72083, 
and 53 minutes for CPT code 72084 to reflect the clinical labor time 
associated with these codes. This same commenter also indicated that a 
number of clinical labor activities had been entered in the database in 
the incorrect service period for CPT codes 37215, 50432, 50694, and 
72081. These clinical labor activities were incorrectly listed in the 
``postservice'' period instead of the ``service post'' period. We 
proposed to make these technical corrections as well so that the 
minutes are assigned to the appropriate service period within the 
direct PE input database.
     Another stakeholder alerted us that ileoscopy CPT codes 
44380, 44381 and 44382 did not include the direct PE input equipment 
item called the Gomco suction machine (EQ235) and indicated that this 
omission appeared to be inadvertent. We agreed that it was. We have 
included the item EQ235 in the final direct PE input database for CPT 
code 44380 at a time of 29 minutes, for CPT code 44381 at a time of 39 
minutes, and CPT code 44382 at a time of 34 minutes.
    The PE RVUs displayed in Addendum B on our Web site were calculated 
with the inputs displayed in the CY 2017 direct PE input database.
    Comment: One commenter expressed support for the proposed technical 
corrections to these services.
    Response: We appreciate the support from the commenter. After 
consideration of comments received, we are finalizing these technical 
corrections.
    Comment: Several commenters contacted CMS during the comment period 
after noticing that six services where CMS proposed to accept the 
refinement panel work RVU did not contain the updated work RVU in the

[[Page 80190]]

Addendum B file for the proposed rule. These commenters requested that 
CMS address these discrepancies.
    Response: We appreciate the assistance from the commenters in 
recognizing these discrepancies. We have corrected them and assigned 
the refinement panel work RVUs to the six services in question.
    Comment: One commenter stated that there were potential technical 
errors in the clinical labor inputs for CPT codes 88329, 88331, 88360, 
and 88361.
    Response: We have reviewed these codes and they do not contain 
technical errors. The clinical labor inputs were adjusted in the CY 
2016 rule cycle as a result of CMS refinement (80 FR 70981-70983).
(5) Restoration of Inputs
    Several of the PE worksheets included in the RUC recommendations 
for CY 2016 contained time for the equipment item ``xenon light 
source'' (EQ167). Because there appeared to be two special light 
sources already present (the fiberoptic headlight and the endoscope 
itself) in the services for which this equipment item was recommended 
by the RUC, we believed that the use of only one of these light sources 
would be typical and proposed to remove the xenon light equipment time. 
In the CY 2016 PFS final rule with comment period, we restored the 
xenon light (EQ167) and removed the fiberoptic headlight (EQ170) with 
the same number of equipment minutes for CPT codes 30300, 31295, 31296, 
31297, and 92511.
    We received comments expressing approval for the restoration of the 
xenon light. However, the commenters also stated that the two light 
sources were not duplicative, but rather, both a headlight and a xenon 
light source are required concurrently for otolaryngology procedures 
when scopes are utilized. The commenters requested that the fiberoptic 
headlight be restored to these codes.
    We agreed with the commenters that the use of both light sources 
would be typical for these procedures. Therefore, we proposed in the CY 
2017 proposed rule to add the fiberoptic headlight (EQ170) to CPT codes 
30300, 31295, 31296, 31297, and 92511 at the same number of equipment 
minutes as the xenon light (EQ167).
    Comment: One commenter expressed appreciation for the CMS proposal 
to restore the fiberoptic headlight to the codes in question. The 
commenter also stated that it had supplied invoices for LED lights, 
which are significantly less expensive than the xenon light source, as 
it was this commenter's understanding that xenon lights are no longer 
the typical light source for these procedures and they are no longer 
widely available for purchase from vendors. The commenter expressed 
support for retaining the xenon light as the standard light source line 
item for all endoscopy codes if that remained CMS' preference.
    Response: We appreciate the support for our proposal from the 
commenter, as well as the submission of additional information 
regarding the typical light source for these procedures. We will add 
the LED light source to our equipment database at the submitted invoice 
price of $1,915.00. However, we will not replace the xenon light with 
the LED light at this time, as we believe the subject deserves further 
consideration. We will consider proposing this change in future 
rulemaking.
    Comment: We received new invoices for the xenon light equipment 
from a different commenter which averaged out to a price of $12,298.00.
    Response: We are finalizing our proposed price of $7,000.00 for the 
xenon light source. Since we received a comment stating that xenon 
lights are no longer a typical light source for procedure use, and that 
they have been supplanted by the use of LED lights, we are viewing the 
current input as a proxy item, and therefore, do not believe that it 
would be appropriate to increase the cost of the xenon light source at 
this time. We will consider making a proposal to address this subject 
in future rulemaking.
    After consideration of comments received, we are finalizing our 
proposal to add the fiberoptic headlight (EQ170) to CPT codes 30300, 
31295, 31296, 31297, and 92511 at the same number of equipment minutes 
as the xenon light (EQ167).
(6) Updates to Prices for Existing Direct PE Inputs
    In the CY 2011 PFS final rule with comment period (75 FR 73205), we 
finalized a process to act on public requests to update equipment and 
supply price and equipment useful life inputs through annual 
rulemaking, beginning with the CY 2012 PFS proposed rule. For CY 2017, 
we proposed the following price updates for existing direct PE inputs:
    Several commenters wrote to discuss the price of the Antibody 
Estrogen Receptor monoclonal (SL493). We received information including 
three invoices with new pricing information regarding the SL493 supply. 
We proposed to use this information to propose for the supply item 
SL493 a price of $14.00 per test, which is the average price based on 
the invoices that we received in total for the item.
    Comment: Several commenters supported the proposed price increase 
and urged CMS to finalize the proposal.
    Response: We appreciate the support from the commenters. After 
consideration of comments received, we are finalizing the price of the 
Antibody Estrogen Receptor monoclonal (SL493) supply at $14.00 as 
proposed.
    We also proposed to update the price for two supplies in response 
to the submission of new invoices. The proposed price for ``antigen, 
venom'' supply (SH009) reflects an increase from $16.67 to $20.14 per 
milliliter, and the proposed price for ``antigen, venom, tri-vespid'' 
supply (SH010) reflects an increase from $30.22 to $44.05 per 
milliliter.
    Comment: Several commenters stated that they strongly supported the 
proposed price updates for antigen supplies and urged CMS to finalize 
the proposal.
    Response: We appreciate the support from the commenters. After 
consideration of comments received, we are finalizing the price of the 
``antigen, venom'' (SH009) and ``antigen, venom, tri-vespid'' (SH010) 
supplies as proposed.
    We proposed to remove the laser tip, diffuser fiber supply (SF030) 
and replace it with the laser tip, bare (single use) supply (SF029) for 
CPT code 31572 (formerly placeholder code 317X1). We did not propose a 
price change for the SF030 supply.
    Comment: In reference to CPT code 52648, a commenter stated that 
the price for the laser tip, diffuser fiber supply (SF030) was 
decreasing from $850 to $197.50. The commenter stated that the 
methodology for this adjustment was opaque, unanticipated, and not 
proposed for comment in the proposed rule. The commenter stated that 
the $850 supply cost would be more appropriate for the laser tip, 
diffuser fiber supply.
    Response: We stated in the CY 2017 proposed rule (81 FR 46247) that 
we did not believe that the submitted invoice for the laser tip, 
diffuser supply at $197.50 was current enough to establish a new price 
for the supply. As a result, we proposed to remove the laser tip, 
diffuser fiber supply (SF030) and replaced it with the laser tip, bare 
(single use) supply (SF029) for CPT code 31572 (Laryngoscopy, flexible; 
with ablation or destruction of lesion(s) with laser, unilateral), as 
we did not believe that it was appropriate to use a supply with an 
outdated invoice. However, we inadvertently set the price of the laser 
tip, diffuser fiber supply to

[[Page 80191]]

$197.50 in the proposed direct PE input database in contradiction of 
our written proposal. We apologize for the confusion caused by this 
error. In the final direct PE input database, we are restoring the 
price of the laser tip, diffuser fiber supply to $850.00, since we did 
not intend to propose a change the price of this supply. We are also 
requesting the submission of additional current pricing information for 
the laser tip, diffuser fiber supply, given the significant difference 
between the $197.50 and $850.00 prices.
    Comment: A commenter submitted two invoices containing pricing data 
for a Cook Biopsy device.
    Response: While we appreciate the submission of this pricing 
information from the commenter, we are unable to determine which supply 
or equipment item these invoices were in reference to. The invoices 
were not mentioned in the text of the commenter's letter. We request 
that invoices submitted for pricing updates should contain clear 
documentation regarding the item in question: its name, the CMS supply/
equipment code that it references (if any), the unit quantity if the 
item is shipped in boxes or batches, and any other information relevant 
for pricing.
    We routinely accept public submission of invoices as part of our 
process for developing payment rates for new, revised, and potentially 
misvalued codes. Often these invoices are submitted in conjunction with 
the RUC-recommended values for the codes. For CY 2017, we note that 
some stakeholders have submitted invoices for new, revised, or 
potentially misvalued codes after the February deadline established for 
code valuation recommendations. To be considered for a given year's 
proposed rule, we generally need to receive invoices by the same 
February deadline. In similar fashion, we generally need to receive 
invoices by the end of the comment period for the proposed rule in 
order to consider them for supply and equipment pricing in the final 
rule for that calendar year. Of course, we consider invoices submitted 
as public comments during the comment period following the publication 
of the proposed rule when relevant for services with values open for 
comment, and will consider any other invoices received after February 
and/or outside of the public comment process as part of our established 
annual process for requests to update supply and equipment prices as 
finalized in the CY 2011 final rule with comment period (75 FR 73205).
(7) Radiation Treatment Delivery Practice Expense RVUs
    Comment: Several commenters noticed that there was a 10 percent 
decrease in the proposed Non Facility PE RVUs for HCPCS code G6011 
despite proposed changes in direct PE inputs. Commenters requested an 
explanation for why this decrease was taking place, and referenced 
section 3 of the Patient Access and Medicare Protection Act (PAMPA) 
(Pub. L. 114-115, enacted December 18, 2015), which requires CMS to 
maintain the associated ``definitions, units, and inputs'' for certain 
radiation treatment and related services for CY 2017 and CY 2018. 
Several commenters stated that they believed that this decrease in the 
PE RVU was in violation of section 1848(c)(2)(C)(i-ii) of the Act 
(added by section 3 of the PAMPA), which requires inputs for these 
services to remain unchanged for CY 2017 and 2018.
    Response: We agree with the commenters that we did not propose to 
change any of the direct PE inputs for HCPCS code G6011, and we 
understand the proposed change in the nonfacility PE RVUs would 
generally not be expected absent a corresponding change in direct PE 
inputs. However, the change in the PE RVU for HCPCS code G6011 is 
caused by a significant shift in the specialties furnishing the service 
in the Medicare claims data. In the claims data we used to establish 
the PE RVUs for CY 2016, dermatology furnished 51 percent of the 
services, while radiation oncology furnished 43 percent. The most 
recent claims data reflects a major shift, with radiation oncology now 
furnishing about 85 percent of the services and dermatology only about 
6 percent. The decrease in the PE RVU between CY 2016 and CY 2017 
resulted from this shift in specialty mix, as the specialties actually 
furnishing the service, reflected in the claims data, have a higher 
percentage of direct PE relative to indirect PE, and therefore, a lower 
percentage of indirect PE, than the specialties that were previously 
furnishing the service in the claims data. In other words, consistent 
with the established methodology for allocating indirect PE to 
services, a specialty mix with a lower percentage of indirect PE 
results in fewer indirect PE RVUs being allocated and a lower overall 
PE RVU for the code even though the direct PE inputs have remained the 
same. This kind of shift is relatively unusual outside of low-volume 
codes, but it is consistent with our established methodology for 
allocating indirect PE to services. We believe that in many cases, the 
change in specialty utilization for a particular service would warrant 
a re-examination of the direct PE inputs for the service under the 
misvalued code initiative. Given the statutory provision that prohibits 
us from changing the direct PE inputs prior to CY 2019 or considering 
these services as potentially misvalued, we will consider this issue 
further for future rulemaking.
    We recognize that this change would be unanticipated, but we do not 
believe there is a straightforward, transparent way to offset the 
change since the statutory provision requires that we maintain the 
direct inputs for the PE RVUs. We note that this change is unique among 
the radiation therapy and related imaging codes where the maintenance 
of inputs has generally resulted in payment rate stability for these 
services.

B. Determination of Malpractice Relative Value Units (RVUs)

1. Overview
    Section 1848(c) of the Act requires that each service paid under 
the PFS be composed of three components: Work, PE, and malpractice (MP) 
expense. As required by section 1848(c)(2)(C)(iii) of the Act, 
beginning in CY 2000, MP RVUs are resource based. Malpractice RVUs for 
new codes after 1991 were extrapolated from similar existing codes or 
as a percentage of the corresponding work RVU. Section 1848(c)(2)(B)(i) 
of the Act also requires that we review, and if necessary adjust, RVUs 
no less often than every 5 years. In the CY 2015 PFS final rule with 
comment period, we implemented the third review and update of MP RVUs. 
For a comprehensive discussion of the third review and update of MP 
RVUs see the CY 2015 proposed rule (79 FR 40349 through 40355) and 
final rule with comment period (79 FR 67591 through 67596).
    To determine MP RVUs for individual PFS services, our MP 
methodology is comprised of three factors: (1) Specialty-level risk 
factors derived from data on specialty-specific MP premiums incurred by 
practitioners, (2) service level risk factors derived from Medicare 
claims data of the weighted average risk factors of the specialties 
that furnish each service, and (3) an intensity/complexity of service 
adjustment to the service level risk factor based on either the higher 
of the work RVU or clinical labor RVU. Prior to CY 2016, MP RVUs were 
only updated once every 5 years, except in the case of new and revised 
codes.
    As explained in the CY 2011 PFS final rule with comment period (75 
FR

[[Page 80192]]

73208), MP RVUs for new and revised codes effective before the next 5-
year review of MP RVUs were determined either by a direct crosswalk 
from a similar source code or by a modified crosswalk to account for 
differences in work RVUs between the new/revised code and the source 
code. For the modified crosswalk approach, we adjust (or scale) the MP 
RVU for the new/revised code to reflect the difference in work RVU 
between the source code and the new/revised work RVU (or, if greater, 
the difference in the clinical labor portion of the fully implemented 
PE RVU) for the new code. For example, if the proposed work RVU for a 
revised code were 10 percent higher than the work RVU for its source 
code, the MP RVU for the revised code would be increased by 10 percent 
over the source code MP RVU. Under this approach, the same risk factor 
is applied for the new/revised code and source code, but the work RVU 
for the new/revised code is used to adjust the MP RVUs for risk.
    In the CY 2016 PFS final rule with comment period (80 FR 70906 
through 70910), we finalized a policy to begin conducting annual MP RVU 
updates to reflect changes in the mix of practitioners providing 
services (using Medicare claims data), and to adjust MP RVUs for risk 
for intensity and complexity (using the work RVU or clinical labor 
RVU). We also finalized a policy to modify the specialty mix assignment 
methodology (for both MP and PE RVU calculations) to use an average of 
the 3 most recent years of data instead of a single year of data. We 
stated that under this approach, the specialty-specific risk factors 
would continue to be updated through notice and comment rulemaking 
every 5 years using updated premium data, but would remain unchanged 
between the 5-year reviews.
    For CY 2016, we did not propose to discontinue our current approach 
for determining MP RVUs for new/revised codes. For the new and revised 
codes for which we proposed work RVUs and PE inputs, we also published 
the proposed MP crosswalks used to determine their MP RVUs. We address 
comments regarding valuation of new and revised codes in section II.L 
of this final rule, which makes clear the codes with interim final 
values for CY 2016 had newly proposed values for CY 2017, all of which 
were again open for comment. The MP crosswalks for new and revised 
codes with interim final values were established in the CY 2016 PFS 
final rule with comment period; we proposed these same crosswalks in 
the CY 2017 PFS proposed rule.
2. Updating Specialty Specific Risk Factors
    The proposed CY 2017 GPCI update (eighth update), discussed in 
section II.E of this final rule, reflects updated MP premium data, 
collected for the purpose of proposing updates to the MP GPCIs. 
Although we could have used the updated MP premium data obtained for 
the purposes of the proposed eighth GPCI update to propose updates to 
the specialty risk factors used in the calculation of MP RVUs, this 
would not be consistent with the policy we previously finalized in the 
CY 2016 PFS final rule with comment period. In that rule, we indicated 
that the specialty-specific risk factors would continue to be updated 
through notice and comment rulemaking every 5 years using updated 
premium data, but would remain unchanged between the 5-year reviews. 
Additionally, consistent with the statutory requirement at section 
1848(e)(1)(C) of the Act, only one half of the adjustment to MP GPCIs 
would be applied for CY 2017 based on the new MP premium data. As such, 
we did not think it would be appropriate to propose to update the 
specialty risk factors for CY 2017 based on the updated MP premium data 
that is reflected in the proposed CY 2017 GPCI update. Therefore, we 
did not propose to update the specialty-risk factors based on the new 
premium data collected for the purposes of the 3-year GPCI update for 
CY 2017 at this time. However, we solicited comment on whether we 
should consider doing so, perhaps as early as for 2018, prior to the 
fourth review and update of MP RVUs that must occur no later than CY 
2020.
    The following is summary of the comments we received on whether we 
should consider updating the specialty-risk factors based on the new 
premium data collected for the purposes of the 3-year GPCI update, 
perhaps as early as for 2018, prior to the fourth review and update of 
MP RVUs that must occur no later than CY 2020.
    Comment: We received few comments regarding this issue. Some 
commenters, including the RUC, recommended that CMS use the updated MP 
premium data collected as part of the CY 2017 GPCI update in the 
creation of the MP RVUs for CY 2017. One commenter stated that CMS 
should follow its normal process to update MP RVUs for CY 2020. Another 
commenter supported the technical and policy changes that CMS made 
related to the MP RVUs for the CY 2016 PFS, and appreciated CMS' 
reluctance to change direction a year later and use the updated 
malpractice premium data gathered for the purpose of the GPCI update, 
in advance of the next 5-year review of the MP RVUs, to propose updates 
to the specialty risk factors used in the calculation of MP RVUs. The 
commenter suggested that CMS consider using the updated data to update 
the specialty-risk factors in the MP RVU methodology as early as CY 
2018, noting that by CY 2018, the adjustment of the malpractice GPCIs 
would be complete, so the potential disconnect in the use of the 
updated premium data would no longer be an issue.
    Response: We appreciate the commenters' feedback. In response to 
the commenters who recommended that CMS use the updated MP premium data 
collected as part of the CY 2017 GPCI update in the creation of the MP 
RVUs for CY 2017, we reiterate that we did not propose to update the 
specialty-risk factors based on the new premium data collected for the 
purposes of the 3-year GPCI update for the CY 2017 MP RVUs. Instead, we 
solicited comment on whether we should consider doing so prior to the 
next 5-year interval, perhaps as early as for CY 2018. We will consider 
the possibility of using the updated MP data to update the specialty 
risk factors used in the calculation of the MP RVUs prior to the next 
5-year update in future rulemaking.
    Comment: One commenter stated that CPT code 93355 should be added 
to the MP RVUs Invasive Cardiology Outside of Surgical Range list so 
that the surgical risk factor is applied when calculating the MP RVU.
    Response: We did not previously propose to include this code on the 
list of Invasive Cardiology Outside of Surgical Range when we updated 
MP risk factors for CY 2015 and we did not propose the change in the CY 
2017 PFS proposed rule. We will consider that request for future 
rulemaking in conjunction with the next update of MP risk factors.

C. Medicare Telehealth Services

1. Billing and Payment for Telehealth Services
    Several conditions must be met for Medicare to make payments for 
telehealth services under the PFS. The service must be on the list of 
Medicare telehealth services and meet all of the following additional 
requirements:
     The service must be furnished via an interactive 
telecommunications system.
     The service must be furnished by a physician or other 
authorized practitioner.
     The service must be furnished to an eligible telehealth 
individual.

[[Page 80193]]

     The individual receiving the service must be located in a 
telehealth originating site.
    When all of these conditions are met, Medicare pays a facility fee 
to the originating site and makes a separate payment to the distant 
site practitioner furnishing the service.
    Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth 
services to include professional consultations, office visits, office 
psychiatry services, and any additional service specified by the 
Secretary, when furnished via a telecommunications system. We first 
implemented this statutory provision, which was effective October 1, 
2001, in the CY 2002 PFS final rule with comment period (66 FR 55246). 
We established a process for annual updates to the list of Medicare 
telehealth services as required by section 1834(m)(4)(F)(ii) of the Act 
in the CY 2003 PFS final rule with comment period (67 FR 79988).
    As specified at Sec.  410.78(b), we generally require that a 
telehealth service be furnished via an interactive telecommunications 
system. Under Sec.  410.78(a)(3), an interactive telecommunications 
system is defined as multimedia communications equipment that includes, 
at a minimum, audio and video equipment permitting two-way, real-time 
interactive communication between the patient and distant site 
physician or practitioner.
    Telephones, facsimile machines, and stand-alone electronic mail 
systems do not meet the definition of an interactive telecommunications 
system. An interactive telecommunications system is generally required 
as a condition of payment; however, section 1834(m)(1) of the Act 
allows the use of asynchronous ``store-and-forward'' technology when 
the originating site is part of a federal telemedicine demonstration 
program in Alaska or Hawaii. As specified in Sec.  410.78(a)(1), 
asynchronous store-and-forward is the transmission of medical 
information from an originating site for review by the distant site 
physician or practitioner at a later time.
    Medicare telehealth services may be furnished to an eligible 
telehealth individual notwithstanding the fact that the practitioner 
furnishing the telehealth service is not at the same location as the 
beneficiary. An eligible telehealth individual is an individual 
enrolled under Part B who receives a telehealth service furnished at a 
telehealth originating site.
    Practitioners furnishing Medicare telehealth services are reminded 
that these services are subject to the same non-discrimination laws as 
other services, including the effective communication requirements for 
persons with disabilities of section 504 of the Rehabilitation Act and 
language access for persons with limited English proficiency, as 
required under Title VI of the Civil Rights Act of 1964. For more 
information, see http://www.hhs.gov/ocr/civilrights/resources/specialtopics/hospitalcommunication.
    Practitioners furnishing Medicare telehealth services submit claims 
for telehealth services to the MACs that process claims for the service 
area where their distant site is located. Section 1834(m)(2)(A) of the 
Act requires that a practitioner who furnishes a telehealth service to 
an eligible telehealth individual be paid an amount equal to the amount 
that the practitioner would have been paid if the service had been 
furnished without the use of a telecommunications system.
    Originating sites, which can be one of several types of sites 
specified in the statute where an eligible telehealth individual is 
located at the time the service is being furnished via a 
telecommunications system, are paid a facility fee under the PFS for 
each Medicare telehealth service. The statute specifies both the types 
of entities that can serve as originating sites and the geographic 
qualifications for originating sites. With regard to geographic 
qualifications, Sec.  410.78(b)(4) limits originating sites to those 
located in rural health professional shortage areas (HPSAs) or in a 
county that is not included in a metropolitan statistical area (MSA).
    Historically, we have defined rural HPSAs to be those located 
outside of MSAs. Effective January 1, 2014, we modified the regulations 
regarding originating sites to define rural HPSAs as those located in 
rural census tracts as determined by the Federal Office of Rural Health 
Policy of the Health Resources and Services Administration (HRSA) (78 
FR 74811). Defining ``rural'' to include geographic areas located in 
rural census tracts within MSAs allows for broader inclusion of sites 
within HPSAs as telehealth originating sites. Adopting the more precise 
definition of ``rural'' for this purpose expands access to health care 
services for Medicare beneficiaries located in rural areas. HRSA has 
developed a Web site tool to provide assistance to potential 
originating sites to determine their geographic status. To access this 
tool, see the CMS Web site at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
    An entity participating in a federal telemedicine demonstration 
project that has been approved by, or received funding from, the 
Secretary as of December 31, 2000 is eligible to be an originating site 
regardless of its geographic location.
    Effective January 1, 2014, we also changed our policy so that 
geographic status for an originating site would be established and 
maintained on an annual basis, consistent with other telehealth payment 
policies (78 FR 74400). Geographic status for Medicare telehealth 
originating sites for each calendar year is now based upon the status 
of the area as of December 31 of the prior calendar year.
    For a detailed history of telehealth payment policy, see 78 FR 
74399.
2. Adding Services to the List of Medicare Telehealth Services
    As noted previously, in the CY 2003 PFS final rule (67 FR 79988), 
we established a process for adding services to or deleting services 
from the list of Medicare telehealth services. This process provides 
the public with an ongoing opportunity to submit requests for adding 
services. Under this process, we assign any qualifying request to make 
additions to the list of telehealth services to one of two categories. 
Revisions to criteria that we use to review requests in the second 
category were finalized in the CY 2012 PFS final rule (76 FR 73102). 
The two categories are:
     Category 1: Services that are similar to professional 
consultations, office visits, and office psychiatry services that are 
currently on the list of telehealth services. In reviewing these 
requests, we look for similarities between the requested and existing 
telehealth services for the roles of, and interactions among, the 
beneficiary, the physician (or other practitioner) at the distant site 
and, if necessary, the telepresenter, a practitioner who is present 
with the beneficiary in the originating site. We also look for 
similarities in the telecommunications system used to deliver the 
service; for example, the use of interactive audio and video equipment.
     Category 2: Services that are not similar to the current 
list of telehealth services. Our review of these requests includes an 
assessment of whether the service is accurately described by the 
corresponding code when furnished via telehealth and whether the use of 
a telecommunications system to furnish the service produces 
demonstrated clinical benefit to the patient. Submitted evidence should 
include both a description of relevant clinical studies that 
demonstrate the service furnished by telehealth to a Medicare 
beneficiary

[[Page 80194]]

improves the diagnosis or treatment of an illness or injury or improves 
the functioning of a malformed body part, including dates and findings, 
and a list and copies of published peer reviewed articles relevant to 
the service when furnished via telehealth. Our evidentiary standard of 
clinical benefit does not include minor or incidental benefits.
    Some examples of clinical benefit include the following:
     Ability to diagnose a medical condition in a patient 
population without access to clinically appropriate in-person 
diagnostic services.
     Treatment option for a patient population without access 
to clinically appropriate in-person treatment options.
     Reduced rate of complications.
     Decreased rate of subsequent diagnostic or therapeutic 
interventions (for example, due to reduced rate of recurrence of the 
disease process).
     Decreased number of future hospitalizations or physician 
visits.
     More rapid beneficial resolution of the disease process 
treatment.
     Decreased pain, bleeding, or other quantifiable symptom.
     Reduced recovery time.
    For the list of telehealth services, see the CMS Web site at 
https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html. Requests to add services to the list of Medicare telehealth 
services must be submitted and received no later than December 31 of 
each calendar year to be considered for the next rulemaking cycle. For 
example, qualifying requests submitted before the end of CY 2016 will 
be considered for the CY 2018 proposed rule. Each request to add a 
service to the list of Medicare telehealth services must include any 
supporting documentation the requester wishes us to consider as we 
review the request. Because we use the annual PFS rulemaking process as 
a vehicle for making changes to the list of Medicare telehealth 
services, requesters should be advised that any information submitted 
is subject to public disclosure for this purpose. For more information 
on submitting a request for an addition to the list of Medicare 
telehealth services, including where to mail these requests, see the 
CMS Web site at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
3. Submitted Requests To Add Services to the List of Telehealth 
Services for CY 2017
    Under our existing policy, we add services to the telehealth list 
on a category 1 basis when we determine that they are similar to 
services on the existing telehealth list for the roles of, and 
interactions among, the beneficiary, physician (or other practitioner) 
at the distant site and, if necessary, the telepresenter. As we stated 
in the CY 2012 final rule with comment period (76 FR 73098), we believe 
that the category 1 criteria not only streamline our review process for 
publicly requested services that fall into this category, but also 
expedite our ability to identify codes for the telehealth list that 
resemble those services already on this list.
    We received several requests in CY 2015 to add various services as 
Medicare telehealth services effective for CY 2017. The following 
presents a discussion of these requests, and our decisions regarding 
additions to the CY 2017 telehealth list. Of the requests received, we 
found that four services were sufficiently similar to ESRD-related 
services currently on the telehealth list to qualify on a category 1 
basis. Therefore, we proposed to add the following services to the 
telehealth list on a category 1 basis for CY 2017:
     CPT codes 90967 (End-stage renal disease (ESRD) related 
services for dialysis less than a full month of service, per day; for 
patients younger than 2 years of age; 90968 (End-stage renal disease 
(ESRD) related services for dialysis less than a full month of service, 
per day; for patients 2-11 years of age; 90969 (End-stage renal disease 
(ESRD) related services for dialysis less than a full month of service, 
per day; for patients 12-19 years of age); and 90970 (End-stage renal 
disease (ESRD) related services for dialysis less than a full month of 
service, per day; for patients 20 years of age and older).
    As we indicated in the CY 2015 final rule with comment period (80 
FR 41783), for the ESRD-related services (CPT codes 90963-90966) added 
to the telehealth list for CY 2016, the required clinical examination 
of the catheter access site must be furnished face-to-face ``hands on'' 
(without the use of an interactive telecommunications system) by a 
physician, CNS, NP, or PA. This requirement also applies to CPT codes 
90967-90970.
    While we did not receive a specific request, we also proposed to 
add two advance care planning services to the telehealth list. We have 
determined that these services are similar to the annual wellness 
visits (HCPCS codes G0438 & G0439) currently on the telehealth list:
     CPT codes 99497 (advance care planning including the 
explanation and discussion of advance directives such as standard forms 
(with completion of such forms, when performed), by the physician or 
other qualified health care professional; first 30 minutes, face-to-
face with the patient, family member(s), or surrogate); and 99498 
(advance care planning including the explanation and discussion of 
advance directives such as standard forms (with completion of such 
forms, when performed), by the physician or other qualified health care 
professional; each additional 30 minutes (list separately in addition 
to code for primary procedure)).

We also received requests to add services to the telehealth list that 
do not meet our criteria for Medicare telehealth services. We did not 
propose to add the following procedures for observation care, emergency 
department visits, critical care E/M, psychological testing, and 
physical, occupational and speech therapy, for the reasons noted:
a. Observation Care: CPT Codes--
     99217 (observation care discharge day management (this 
code is to be utilized to report all services provided to a patient on 
discharge from ``observation status'' if the discharge is on other than 
the initial date of ``observation status.'' To report services to a 
patient designated as ``observation status'' or ``inpatient status'' 
and discharged on the same date, use the codes for observation or 
inpatient care services [including admission and discharge services, 
99234-99236 as appropriate.]));
     99218 (initial observation care, per day, for the 
evaluation and management of a patient which requires these three key 
components: A detailed or comprehensive history; a detailed or 
comprehensive examination; and medical decision making that is 
straightforward or of low complexity. Counseling and coordination of 
care with other physicians, other qualified health care professionals, 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and family's needs. Usually, the problem(s) requiring 
admission to ``observation status'' are of low severity. Typically, 30 
minutes are spent at the bedside and on the patient's hospital floor or 
unit);
     99219 (initial observation care, per day, for the 
evaluation and management of a patient, which requires these three key 
components: A comprehensive history; a comprehensive examination; and 
medical decision making of moderate complexity. Counseling and 
coordination of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and family's needs. Usually, the 
problem(s) requiring admission to ``observation status'' are of 
moderate severity.

[[Page 80195]]

Typically, 50 minutes are spent at the bedside and on the patient's 
hospital floor or unit);
     99220 (initial observation care, per day, for the 
evaluation and management of a patient, which requires these three key 
components: A comprehensive history; a comprehensive examination; and 
medical decision making of high complexity. Counseling and coordination 
of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and family's needs. Usually, the 
problem(s) requiring admission to ``observation status'' are of high 
severity. Typically, 70 minutes are spent at the bedside and on the 
patient's hospital floor or unit);
     99224 (subsequent observation care, per day, for the 
evaluation and management of a patient, which requires at least two of 
these three key components: Problem focused interval history; problem 
focused examination; medical decision making that is straightforward or 
of low complexity. Counseling and coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and family's needs. Usually, the patient is stable, recovering, or 
improving. Typically, 15 minutes are spent at the bedside and on the 
patient's hospital floor or unit);
     99225 (subsequent observation care, per day, for the 
evaluation and management of a patient, which requires at least two of 
these three key components: An expanded problem focused interval 
history; an expanded problem focused examination; medical decision 
making of moderate complexity. Counseling and coordination of care with 
other physicians, other qualified health care professionals, or 
agencies are provided consistent with the nature of the problem(s) and 
the patient's and family's needs. Usually, the patient is responding 
inadequately to therapy or has developed a minor complication. 
Typically, 25 minutes are spent at the bedside and on the patient's 
hospital floor or unit);
     99226 (subsequent observation care, per day, for the 
evaluation and management of a patient, which requires at least two of 
these three key components: A detailed interval history; a detailed 
examination; medical decision making of high complexity. Counseling and 
coordination of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and family's needs. Usually, the 
patient is unstable or has developed a significant complication or a 
significant new problem. Typically, 35 minutes are spent at the bedside 
and on the patient's hospital floor or unit);
     99234 (observation or inpatient hospital care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires these three key components: 
A detailed or comprehensive history; a detailed or comprehensive 
examination; and medical decision making that is straightforward or of 
low complexity. Counseling and coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and family's needs. Usually the presenting problem(s) requiring 
admission are of low severity. Typically, 40 minutes are spent at the 
bedside and on the patient's hospital floor or unit);
     99235 (observation or inpatient hospital care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires these three key components: 
A comprehensive history; a comprehensive examination; and medical 
decision making of moderate complexity. Counseling and coordination of 
care with other physicians, other qualified health care professionals, 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and family's needs. Usually the presenting problem(s) 
requiring admission are of moderate severity. Typically, 50 minutes are 
spent at the bedside and on the patient's hospital floor or unit);
     99236 (observation or inpatient hospital care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires these three key components: 
A comprehensive history; a comprehensive examination; and medical 
decision making of high complexity. Counseling and coordination of care 
with other physicians, other qualified health care professionals, or 
agencies are provided consistent with the nature of the problem(s) and 
the patient's and family's needs. Usually the presenting problem(s) 
requiring admission are of high severity. Typically, 55 minutes are 
spent at the bedside and on the patient's hospital floor or unit);
    The request to add these observation services referenced various 
studies supporting the use of observation units. The studies indicated 
that observation units provide safe, cost effective care to patients 
that need ongoing evaluation and treatment beyond the emergency 
department visit by having reduced hospital admissions, shorter lengths 
of stay, increased safety and reduced cost. Additional studies cited 
indicated that observation units reduce the work load on emergency 
department physicians, and reduce emergency department overcrowding.
    In the CY 2005 PFS proposed rule (69 FR 47510), we considered a 
request but did not propose to add the observation CPT codes 99217-
99220 to the list of Medicare telehealth services on a category two 
basis for the reasons described in that rule. The most recent request 
did not include any information that would cause us to question the 
previous evaluation under the category one criterion, which has not 
changed, regarding the significant differences in patient acuity 
between these services and services on the telehealth list. While the 
request included evidence of the general benefits of observation units, 
it did not include specific information demonstrating that the services 
described by these codes provided clinical benefit when furnished via 
telehealth, which is necessary for us to consider these codes on a 
category two basis. Therefore, we did not propose to add these services 
to the list of approved telehealth services.
b. Emergency Department Visits: CPT Codes--
     99281 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: A 
problem focused history; a problem focused examination; and 
straightforward medical decision making. Counseling and coordination of 
care with other physicians, other qualified health care professionals, 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and family's needs. Usually, the presenting 
problem(s) are self-limited or minor);
     99282 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: An 
expanded problem focused history; an expanded problem focused 
examination; and medical decision making of low complexity. Counseling 
and coordination of care with other physicians, other qualified health 
care professionals, or agencies are provided consistent with the nature 
of the problem(s) and the patient's and family's needs. Usually, the 
presenting problem(s) are of low to moderate severity);

[[Page 80196]]

     99283 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: An 
expanded problem focused history; an expanded problem focused 
examination; and medical decision making of moderate complexity. 
Counseling and coordination of care with other physicians, other 
qualified health care professionals, or agencies are provided 
consistent with the nature of the problem(s) and the patient's and 
family's needs. Usually, the presenting problem(s) are of moderate 
severity);
     99284 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: A 
detailed history; a detailed examination; and medical decision making 
of moderate complexity. Counseling and coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and family's needs. Usually, the presenting problem(s) are of high 
severity, and require urgent evaluation by the physician, or other 
qualified health care professionals but do not pose an immediate 
significant threat to life or physiologic function); and
     99285 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components 
within the constraints imposed by the urgency of the patient's clinical 
condition and mental status: A comprehensive history; a comprehensive 
examination; and medical decision making of high complexity. Counseling 
and coordination of care with other physicians, other qualified health 
care professionals, or agencies are provided consistent with the nature 
of the problem(s) and the patient's and family's needs. Usually, the 
presenting problem(s) are of high severity and pose an immediate 
significant threat to life or physiologic function).
    In the CY 2005 PFS proposed rule (69 FR 47510), we considered a 
request but did not propose to add the emergency department visit CPT 
codes 99281-99285 to the list of Medicare telehealth services for the 
reasons described in that rule.
    The current request to add the emergency department E/M services 
stated that the codes are similar to outpatient visit codes (CPT codes 
99201-99215) that have been on the telehealth list since CY 2002. As we 
noted in the CY 2005 PFS final rule, while the acuity of some patients 
in the emergency department might be the same as in a physician's 
office; we believe that, in general, more acutely ill patients are more 
likely to be seen in the emergency department, and that difference is 
part of the reason there are separate codes describing evaluation and 
management visits in the Emergency Department setting. The practice of 
emergency medicine often requires frequent and fast-paced patient 
reassessments, rapid physician interventions, and sometimes the 
continuous physician interaction with ancillary staff and consultants. 
This work is distinctly different from the pace, intensity, and acuity 
associated with visits that occur in the office or outpatient setting. 
Therefore, we did not propose to add these services to the list of 
approved telehealth services on a category one basis.
    The requester did not provide any studies supporting the clinical 
benefit of managing emergency department patients with telehealth which 
is necessary for us to consider these codes on a category two basis. 
Therefore, we did not propose to add these services to the list of 
approved telehealth services on a category two basis.
    Many requesters of additions to the telehealth list urged us to 
consider the potential value of telehealth for providing beneficiaries 
access to needed expertise. We note that if clinical guidance or advice 
is needed in the emergency department setting, a consultation may be 
requested from an appropriate source, including consultations that are 
currently included on the list of telehealth services.
c. Critical Care Evaluation and Management: CPT Codes--
     99291 (critical care, evaluation and management of the 
critically ill or critically injured patient; first 30-74 minutes); and 
99292 (critical care, evaluation and management of the critically ill 
or critically injured patient; each additional 30 minutes (list 
separately in addition to code for primary service).
    We previously considered and rejected adding these codes to the 
list of Medicare telehealth services in the CY 2009 PFS final rule (74 
FR 69744) on a category 1 basis because, due to the acuity of 
critically ill patients, we did not believe critical care services are 
similar to any services on the current list of Medicare telehealth 
services. In that rule, we said that critical care services must be 
evaluated as category 2 services. Because we considered critical care 
services under category 2, we needed to evaluate whether these are 
services for which telehealth can be an adequate substitute for a face-
to-face encounter, based on the category 2 criteria at the time of that 
request. We had no evidence suggesting that the use of telehealth could 
be a reasonable surrogate for the face-to-face delivery of this type of 
care.
    The American Telemedicine Association (ATA) submitted a new request 
for CY 2016 that cited several studies to support adding these services 
on a category 2 basis. To qualify under category 2, we would need 
evidence that the service furnished via telehealth is still described 
accurately by the requested code and produces a clinical benefit for 
the patient via telehealth. However, in reviewing the information 
provided by the ATA and a study titled, ``Impact of an Intensive Care 
Unit Telemedicine Program on Patient Outcomes in an Integrated Health 
Care System,'' published July 2014 in JAMA Internal Medicine, which 
found no evidence that the implementation of ICU telemedicine 
significantly reduced mortality rates or hospital length of stay, which 
could be indicators of clinical benefit. Therefore, we stated that we 
do not believe that the submitted evidence demonstrates a clinical 
benefit to patients. Therefore, we did not propose to add these 
services on a category 2 basis to the list of Medicare telehealth 
services for CY 2016 (80 FR 71061).
    This year, requesters cited additional studies to support adding 
critical care services to the Medicare telehealth list on a category 2 
basis. Eight of the studies dealt with telestroke and one with 
teleneurology. Telestroke is an approach that allows a neurologist to 
provide remote treatment to vascular stroke victims. Teleneurology 
offers consultations for neurological problems from a remote location. 
It may be initiated by a physician or a patient, for conditions such as 
headaches, dementia, strokes, multiple sclerosis and epilepsy.
    However, according to the literature, the management of stroke via 
telehealth requires more than a single practitioner and is distinct 
from the work described by the above E/M codes, 99291 and 99292. One 
additional study cited involved pediatric patients, while another noted 
that the Department of Defense has used telehealth to provide critical 
care services to hospitals in Guam for many years. Another reference 
study indicated that consulting intensivists thought that telemedicine 
consultations were superior to telephone consultations. In all of these 
cases, we believe the evidence demonstrates that interaction between 
these patients and distant site practitioners can have clinical 
benefit.

[[Page 80197]]

However, we do not agree that the kinds of services described in the 
studies are those that are included in the above critical care E/M 
codes 99291 and 99292. We note that CPT guidance makes clear that a 
variety of other services are bundled into the payment rates for 
critical care, including gastric intubations and vascular access 
procedures among others We do not believe these kinds of services are 
furnished via telehealth. Public comments, included cited studies, can 
be viewed at https://www.regulations.gov/#!documentDetail;D=CMS-2015-
0081-0002. Therefore, we did not propose to add CPT codes 99291 or 
99292 to the list of Medicare telehealth services for CY 2017.
    However, we are persuaded by the requests that we recognize the 
potential benefit of critical care consultation services that are 
furnished remotely. We note that there are currently codes on the 
telehealth list that could be reported when consultation services are 
furnished to critically ill patients. In consideration of these public 
requests, we recognize that there may be greater resource costs 
involved in furnishing these services relative to the existing 
telehealth consultation codes. We also agree with the requesters that 
there may be potential benefits of remote care by specialists for these 
patients. For these reasons, we think it would be advisable to create a 
coding distinction between telehealth consultations for critically ill 
patients, for example stroke patients, relative to telehealth 
consultations for other hospital patients. Such a coding distinction 
would allow us to recognize the additional resource costs in terms of 
time and intensity involved in furnishing such services, under the 
conditions where remote, intensive consultation is required to provide 
access to appropriate care for the critically ill patient. We recognize 
that the current set of E/M codes, including current CPT codes 99291 
and 99292, may not adequately describe such services because current E/
M coding presumes that the services are occurring in-person, in which 
case the expert care would be furnished in a manner described by the 
current codes for critical care.
    Therefore, we proposed to make payment through new HCPCS codes 
G0508 and G0509, initial and subsequent, used to describe critical care 
consultations furnished via telehealth. This new coding would provide a 
mechanism to report an intensive telehealth consultation service, 
initial or subsequent, for the critically ill patient, such as a stroke 
patient, under the circumstance when a qualified health care 
professional has in-person responsibility for the patient but the 
patient benefits from additional services from a distant-site 
consultant specially trained in providing critical care services. We 
proposed limiting these services to once per day per patient. Like the 
other telehealth consultations, these services would be valued relative 
to existing E/M services.
    More details on the new coding (G0508 and G0509) and valuation for 
these services are discussed in section II.L. of this final rule and 
the final RVUs for this service are included in Addendum B of this 
final rule, including a summary of the public comments we received and 
our responses to the comments. Like the other telehealth consultation 
codes, we proposed that these services would be added to the telehealth 
list and would be subject to the geographic and other statutory 
restrictions that apply to telehealth services.
d. Psychological Testing: CPT Codes--
     96101 (psychological testing (includes psychodiagnostic 
assessment of emotionality, intellectual abilities, personality and 
psychopathology, e.g., MMPI, Rorschach, WAIS), per hour of the 
psychologist's or physician's time, both face-to-face time 
administering tests to the patient and time interpreting these test 
results and preparing the report);
     96102 psychological testing (includes psychodiagnostic 
assessment of emotionality, intellectual abilities, personality and 
psychopathology, e.g., MMPI and WAIS), with qualified health care 
professional interpretation and report, administered by technician, per 
hour of technician time, face-to-face);
     96118 Neuropsychological testing (e.g., Halstead-Reitan 
neuropsychological battery, Wechsler memory scales and Wisconsin card 
sorting test), per hour of the psychologist's or physician's time, both 
face-to-face time administering tests to the patient and time 
interpreting these test results and preparing the report); and,
     96119 Neuropsychological testing (e.g., Halstead-Reitan 
neuropsychological battery, Wechsler memory scales and Wisconsin card 
sorting test), with qualified health care professional interpretation 
and report, administered by technician, per hour of technician time, 
face-to-face).
    Requesters indicated that there is nothing in the Minnesota 
Multiphasic Personality Inventory (MMPI), the Rorschach inkblot test, 
the Wechsler Adult Intelligence Scale (WAIS), the Halstead-Reitan 
Neuropsychological Battery and Allied Procedures, or the Wisconsin Card 
Sorting Test (WCST), that cannot be done via telehealth nor is 
different than neurological tests done for Parkinson's disease, seizure 
medication side effects, gait assessment, nor any of the many 
neurological examinations done via telehealth with the approved 
outpatient office visit and inpatient visit CPT codes currently on the 
telehealth list. As an example, requesters indicated that the MPPI is 
administered by a computer, which generates a report that is 
interpreted by the clinical psychologist, and that the test requires no 
interaction between the clinician and the patient.
    We previously considered the request to add these codes to the 
Medicare telehealth list in the CY 2015 final rule with comment period 
(79 FR 67600). We decided not to add these codes, indicating that these 
services are not similar to other services on the telehealth list 
because they require close observation of how a patient responds. We 
noted that the requesters did not submit evidence supporting the 
clinical benefit of furnishing these services via telehealth so that we 
could evaluate them on a category 2 basis. While we acknowledge that 
requesters believe that some of these tests require minimal, if any, 
interaction between the clinician and patient, we disagree. We continue 
to believe that successful completion of the tests listed as examples 
in these codes require the clinical psychologist to closely observe the 
patient's response, which cannot be performed via telehealth. Some 
patient responses, for example, sweating and fine tremors, may be 
missed when the patient and examiner are not in the same room. 
Therefore, we did not propose to add these services to the list of 
Medicare telehealth services for CY 2017.
e. Physical and Occupational Therapy and Speech-Language Pathology 
Services: CPT Codes--
     92507 (treatment of speech, language, voice, 
communication, and auditory processing disorder; individual); and, 
92508 (treatment of speech, language, voice, communication, and 
auditory processing disorder; group, 2 or more individuals); 92521 
(evaluation of speech fluency (e.g., stuttering, cluttering)); 92522 
(evaluation of speech sound production (e.g., articulation, 
phonological process, apraxia, dysarthria)); 92523 (evaluation of 
speech sound production (e.g., articulation, phonological process, 
apraxia, dysarthria); with evaluation of language comprehension and 
expression

[[Page 80198]]

(e.g., receptive and expressive language)); 92524 (behavioral and 
qualitative analysis of voice and resonance); (evaluation of oral and 
pharyngeal swallowing function); 92526 (treatment of swallowing 
dysfunction or oral function for feeding); 92610 (evaluation of oral 
and pharyngeal swallowing function); CPT codes 97001 (physical therapy 
evaluation); 97002 (physical therapy re-evaluation); 97003 
(occupational therapy evaluation); 97004 (occupational therapy re-
evaluation); 97110 (therapeutic procedure, 1 or more areas, each 15 
minutes; therapeutic exercises to develop strength and endurance, range 
of motion and flexibility); 97112 (therapeutic procedure, 1 or more 
areas, each 15 minutes; neuromuscular reeducation of movement, balance, 
coordination, kinesthetic sense, posture, or proprioception for sitting 
or standing activities); 97116 (therapeutic procedure, 1 or more areas, 
each 15 minutes; gait training (includes stair climbing)); 97532 
(development of cognitive skills to improve attention, memory, problem 
solving (includes compensatory training), direct (one-on-one) patient 
contact, each 15 minutes); 97533 (sensory integrative techniques to 
enhance sensory processing and promote adaptive responses to 
environmental demands, direct (one-on-one) patient contact, each 15 
minutes); 97535 (self-care/home management training (e.g., activities 
of daily living (adl) and compensatory training, meal preparation, 
safety procedures, and instructions in use of assistive technology 
devices/adaptive equipment) direct one-on-one contact, each 15 
minutes); 97537 (community/work reintegration training (e.g., shopping, 
transportation, money management, avocational activities or work 
environment/modification analysis, work task analysis, use of assistive 
technology device/adaptive equipment), direct one-on-one contact, each 
15 minutes); 97542 (wheelchair management (e.g., assessment, fitting, 
training), each 15 minutes); 97750 (physical performance test or 
measurement (e.g., musculoskeletal, functional capacity), with written 
report, each 15 minutes); 97755 (assistive technology assessment (e.g., 
to restore, augment or compensate for existing function, optimize 
functional tasks and maximize environmental accessibility), direct one-
on-one contact, with written report, each 15 minutes); 97760 
Orthotic(s) management and training (including assessment and fitting 
when not otherwise reported), upper extremity(s), lower extremity(s) 
and/or trunk, each 15 minutes); 97761 (prosthetic training, upper and 
lower extremity(s), each 15 minutes); and 97762 (checkout for orthotic/
prosthetic use, established patient, each 15 minutes).
    The statute defines who is an authorized practitioner of telehealth 
services. Physical therapists, occupational therapists and speech-
language pathologists are not authorized practitioners of telehealth 
under section 1834(m)(4)(E) of the Act, as defined in section 
1842(b)(18)(C) of the Act. Because the above services are predominantly 
furnished by physical therapists, occupational therapists and speech-
language pathologists, we do not believe it would be appropriate to add 
them to the list of telehealth services at this time. One requester 
suggested that we can add telehealth practitioners without legislation, 
as evidenced by the addition of nutritional professionals. However, we 
do not believe we have such authority and note that nutritional 
professionals are included as practitioners in the definition at 
section 1834(b)(18)(C)(vi) of the Act, and thus, are within the 
statutory definition of telehealth practitioners. Therefore, we did not 
propose to add these services to the list of Medicare telehealth 
services for CY 2017.
    In summary, we proposed to add the following codes to the list of 
Medicare telehealth services beginning in CY 2017 on a category 1 
basis:
     ESRD-related services 90967 through 90970. The required 
clinical examination of the catheter access site must be furnished 
face-to-face ``hands on'' (without the use of an interactive 
telecommunications system) by a physician, CNS, NP, or PA.
     Advance care planning (CPT codes 99497 and 99498).
     Telehealth Consultations for a Patient Requiring Critical 
Care Services (G0508 and G0509).
    The following is summary of the comments we received regarding the 
proposed addition of services to the list of Medicare telehealth 
services:
    Comment: Many commenters supported one or more of our proposals to 
add ESRD-related services (CPT codes 90967, 90968, 90969 and 90970) and 
advance care planning services (CPT codes 99497 and 99498) to the list 
of Medicare telehealth services for CY 2017.
    Response: We appreciate the commenters' support for the proposed 
additions to the list of Medicare telehealth services. After 
consideration of the public comments received, we are finalizing our 
proposal to add these services to the list of Medicare telehealth 
services for CY 2017 on a category 1 basis.
    Comment: Many commenters also supported the proposal to make 
payment through new codes, initial and subsequent, used to describe 
critical care consultations furnished via telehealth. Commenters 
indicated that the codes will improve patient outcomes and quality of 
care.
    Response: We thank the commenters for their support. We believe the 
new coding G0508 and G0509 would provide a mechanism to report an 
intensive telehealth consultation service, initial or subsequent, for 
the critically ill patient, for example a stroke patient, under the 
circumstance when a qualified health care professional has in-person 
responsibility for the patient but the patient benefits from additional 
services from a distant-site consultant specially trained in furnishing 
critical care services. After consideration of the public comments 
received, we are finalizing our proposal to add these critical care 
consultation services to the list of Medicare telehealth services for 
CY 2017 on a category 1 basis. We are finalizing these services as 
limited to once per day per patient.
    We are also finalizing our proposal to make payment for these 
critical care consultation services through new codes G0508 and G0509, 
initial and subsequent, used to describe critical care consultations 
furnished via telehealth. More details on the new coding and valuation 
for these services are discussed in section II.L. of this final rule 
and the final RVUs for this service are included in Addendum B of this 
final rule. Like the other telehealth consultation codes, we proposed 
and are finalizing that these services would be added to the telehealth 
list and would be subject to the geographic and other statutory 
restrictions that apply to telehealth services.
    Comment: Several commenters agreed with our decision not to add 
psychological and neuropsychological testing services to the telehealth 
list, noting that the face-to-face contact between the psychologist or 
technician and the beneficiary is critical for detecting behaviors 
related to test taking, such as movements or other nonverbal signals 
that could be missed by using current telehealth media.
    A few commenters disagreed with our decision not to add 
psychological and neuropsychological testing services. Commenters cited 
general benefits, such as increased access to care, improved health 
outcomes, and as a remedy to address provider shortages. One commenter 
maintained that the requested codes are similar to many

[[Page 80199]]

neurological examinations done via telehealth with the approved 
outpatient office visit and inpatient visit CPT codes currently on the 
telehealth list.
    Response: As noted above, we previously considered the request to 
add these codes to the telehealth list, on a category 1 basis, in the 
CY 2015 final rule with comment period (79 FR 67600). We decided not to 
add these codes, indicating that these services are not similar to 
other services on the telehealth list because they require close 
observation of how a patient responds. Commenters provided no evidence 
of clinical benefit, which is necessary to support adding these 
services on a category 2 basis. Therefore, we are not adding these 
services to the list of Medicare list telehealth services for CY 2017.
    Comment: A few commenters disagreed with our decision not to add 
observation care and emergency department visits. Commenters cited 
general benefits, such as improved quality of care, reduced physician 
workload, reduced emergency department overcrowding, and reduced 
shortage of available specialty services. Concerning CPT codes 99281-
99283, one commenter indicated that none of these codes include what is 
categorized as a ``detailed'' or ``comprehensive'' history or exam; 
none of these codes include complexity in medical decision making that 
is categorized as ``high;'' and none of these codes include presenting 
problems of ``high'' or ``high severity/immediate significant threat to 
life or physiological function.''
    Response: As noted above, we previously considered and rejected 
adding these codes to the list of Medicare telehealth services in the 
CY 2005 PFS final rule (69 FR 66276) on a category 1 basis because of 
the difference in typical patient acuity relative to any services on 
the current list of Medicare telehealth services. While CPT codes 
99281-99283 may not include a detailed or comprehensive history or exam 
or a high level of medical decision making, we do not agree that these 
codes are similar to outpatient visit codes (CPT codes 99201-99215) 
currently on the list of Medicare telehealth services. As previously 
stated, more acutely ill patients are more likely to be seen in the 
emergency department, and that difference is part of the reason there 
are separate codes describing evaluation and management visits in the 
Emergency Department setting. The work in an Emergency Department 
setting is distinctly different from the pace, intensity, and acuity 
associated with visits that occur in the office or outpatient setting. 
Commenters provided no evidence of clinical benefit for these services 
when furnished via telehealth specifically, which is necessary to 
support adding these services on a category 2 basis. Therefore, we are 
not adding these services to the list of Medicare telehealth services 
for CY 2017.
    We remind stakeholders that if consultative telehealth services are 
required for patients where emergency department or observation care 
services would ordinarily be reported, multiple codes describing 
consultative services are currently on the telehealth list and can be 
used to bill for such telehealth services.
    Comment: Concerning various services primarily furnished by 
physical therapists, occupational therapists, and speech-language 
pathologists, commenters recognized that a statutory change is required 
to allow such services to be added to the list of Medicare telehealth 
services.
    Response: We appreciate commenters recognizing the statutory 
limitation on adding these services. Therefore, we are not adding these 
services to the list of Medicare telehealth services for CY 2017.
4. Place of Service (POS) Code for Telehealth Services
    We have received multiple requests from various stakeholders to 
establish a POS code to identify services furnished via telehealth. 
These requests have come from other payers, but may also be related to 
confusion concerning whether to use the POS where the distant site 
physician is located or the POS where the patient is located. The 
process for establishing POS codes is managed by the POS Workgroup 
within CMS, is available for use by all payers, and is not contingent 
upon Medicare PFS rulemaking. We noted in the CY 2017 proposed rule (81 
FR 46184) that, if such a POS code were created, in order to make it 
valid for use in Medicare, we would have to determine the appropriate 
payment rules associated with the code. Therefore, we proposed how a 
POS code for telehealth would be used under the PFS with the 
expectation that, if such a code is available, it would be used as 
early as January 1, 2017. We proposed that the physicians or 
practitioners furnishing telehealth services would be required to 
report the telehealth POS code to indicate that the billed service is 
furnished as a telehealth service from a distant site. As noted below, 
since the publication of the CY 2017 proposed rule, the telehealth POS 
code has been created.
    Our requirement for physicians and practitioners to use the 
telehealth POS code to report that telehealth services were furnished 
from a distant site would improve payment accuracy and consistency in 
telehealth claims submission. Currently, for services furnished via 
telehealth, we have instructed practitioners to report the POS code 
that would have been reported had the service been furnished in person. 
However, some practitioners use the POS where they are located when the 
service is furnished, while others use the POS corresponding to the 
patient's location.
    Under the PFS, the POS code determines whether a service is paid 
using the facility or non-facility practice expense relative value 
units (PE RVUs). The facility rate is paid when a service is furnished 
in a location where Medicare is making a separate facility payment to 
an entity other than the physician or practitioner that is intended to 
reflect the facility costs associated with the service (clinical staff, 
supplies and equipment). We note that in accordance with section 
1834(m)(2)(B) of the Act, the payment amount for the telehealth 
facility fee paid to the originating site is a national fee, paid 
without geographic or site of service adjustments that generally are 
made for payments to different kinds of Medicare providers and 
suppliers. In the case of telehealth services, we believe that facility 
costs (clinical staff, supplies, and equipment) associated with 
furnishing the service would generally be incurred by the originating 
site, where the patient is located, and not by the practitioner at the 
distant site. The statute requires Medicare to pay a fee to the site 
that hosts the patient. This is analogous to the circumstances under 
which the facility PE RVUs are used to pay for services under the PFS. 
Therefore, we proposed to use the facility PE RVUs to pay for 
telehealth services reported by physicians or practitioners with the 
telehealth POS code. We note that there are only three codes on the 
telehealth list with a difference greater than 1.0 PE RVUs between the 
facility PE RVUs and the non-facility PE RVUs. We did not anticipate 
that this proposal would result in a significant change in the total 
payment for the majority of services on the telehealth list. Moreover, 
many practitioners already use a facility POS when billing for 
telehealth services (those that report the POS of the originating site 
where the beneficiary is located). The policy to use the telehealth POS 
code for telehealth services would not affect payment for

[[Page 80200]]

telehealth services for these practitioners.
    The POS code for telehealth would not apply to originating sites 
billing the facility fee. Originating sites are not furnishing a 
service via telehealth since the patient is physically present in the 
facility. Accordingly, the originating site would continue to use the 
POS code that applies to the type of facility where the patient is 
located.
    We also proposed a change to Sec.  414.22(b)(5)(i)(A) that 
addresses the PE RVUs used in different settings. These revisions would 
improve clarity regarding our current policies. Specifically, we 
proposed to amend this section to specify that the facility PE RVUs are 
paid for practitioner services furnished via telehealth under Sec.  
410.78. In addition, we proposed a change to resolve any potential 
ambiguity and clarify that payment under the PFS is made at the 
facility rate (facility PE RVUs) when services are furnished in a 
facility setting paid by Medicare, including in off-campus provider 
based departments. As proposed, the regulation reflected the policy 
being proposed, for CY 2017 only, to pay the physician the nonfacility 
rate for services furnished in an off-campus provider based department 
that was not excepted under section 603 of the Bipartisan Budget Act of 
2015. Finally, to streamline the existing regulation, we also proposed 
to delete Sec.  414.32 of our regulation that refers to the calculation 
of payments for certain services prior to 2002.
    The following is summary of the comments we received regarding the 
proposal to use a POS code for services furnished via telehealth:
    Comment: Many commenters supported the proposal to use the POS code 
for telehealth, indicating that it would clarify and simplify billing 
requirements, improve payment accuracy and consistency in telehealth 
claims submissions, and provide more reliable data regarding telehealth 
services.
    Response: We appreciate the support for this proposal.
    Comment: One commenter asked us to reconsider the proposal, noting 
that the AMA's CPT Editorial Panel has adopted a telehealth modifier 
for those medical services that are currently covered telehealth 
services by Medicare or other payers, which obviates the need for the 
POS code.
    Response: The POS code was requested by other payers, and we 
continue to believe that adopting it for use in the Medicare program 
would provide consistency in reporting and identifying services 
furnished via telehealth. We have had longstanding HCPCS modifiers for 
telehealth. While these modifiers were not adopted by CPT, they have 
been available for use by other payers. Despite the availability of 
these HCPCS modifiers noting telehealth services, payers have requested 
creation of the new POS code. Therefore, we do not understand why 
introduction of a new CPT modifier as opposed to a HCPCS modifier would 
obviate the need for a POS code. Instead, we agree with other payers 
that the POS code would provide consistency in reporting and 
identifying services furnished via telehealth, since it eliminates the 
need for service-specific rules regarding appropriate POS reporting for 
telehealth services.
    Comment: Another commenter stated that use of the POS code, or 
originating site restrictions, would place additional administrative 
barriers for telepsychiatric access.
    Response: We note that the POS is a required field on the 
professional claim, regardless of whether the service is furnished via 
telehealth. Since a selection needs to be made, we believe that 
requiring the selection of a specific code is no more burdensome than 
requiring the claim to specify the POS appropriate to either the 
setting of the telehealth patient or the setting of the distant site 
practitioner. The POS code does not entail any new originating site 
restrictions.
    Comment: Various commenters asked for clarification of the 
following:
     Whether the POS code would replace the GT modifier.
     Whether the description of telehealth as a service 
furnished via an interactive audio and video telecommunications system 
applies to the POS code as it does to the GT modifier.
     How to ensure proper payment when the distant site 
practitioner is at a facility, but the patient is not.
    Response: Under current policy, use of the GT and GQ modifiers 
certifies that the service meets the telehealth requirements, and would 
continue to be required. The POS code would be used in addition to the 
GT and GQ modifiers. We did not propose to implement a change in the 
requirement to use either the GT and GQ modifier because at the time of 
the proposed rule, we did not know whether the telehealth POS code 
would be made effective for January 1, 2017. However, because under our 
proposal the POS code would serve to identify telehealth services 
furnished under section 1834(m) of the Act via an interactive audio and 
video telecommunications system, we believe that we should consider 
eliminating the required use of the GT and GQ telehealth modifiers, and 
we may revisit this question through future rulemaking. Like the 
modifiers, use of the POS code certifies that the service meets the 
telehealth requirements. Distant site providers will be paid using the 
facility PE RVUs, regardless of their location. The setting of the 
patient does not affect the payment to the distant site provider.
    Comment: Commenters also asked for clarification that the proposal 
to adopt the telehealth POS relates solely to payment, and not to 
licensure requirements. The commenter noted that practitioners who 
furnish telehealth services must adhere to the standard of care and 
licensure rules, regulations and laws of the state where the patient is 
located, just as the practitioner would in a traditional face-to-face 
encounter.
    Response: The commenters are correct that the purpose of our POS 
proposal is to assist in determining proper payment. It will also help 
us to accurately track telehealth utilization and spending. The 
proposal to adopt the telehealth POS code has no bearing on state 
licensure requirements or other state regulations. We appreciate the 
commenters' request for clarification.
    Comment: Several commenters supported the proposal to use the 
facility PE RVUs for telehealth services. One commenter said paying 
some telehealth services at non-facility rates creates undesirable 
financial incentives to prefer telehealth services over services that 
are furnished in person at the originating site.
    Response: We appreciate the support for the proposal and agree with 
the commenter's articulation regarding the importance of developing 
payment rates that reflect the relative resource costs of furnishing 
the services and that do not create unintended financial incentives.
    Comment: Many other commenters opposed the proposal. Commenters 
stated that it would result in lower fees for telehealth services 
furnished by psychologists. Commenters also stated that PE costs 
increase for services furnished via telehealth due to the costs of 
HIPAA-compliant telecommunication equipment.
    One commenter remarked that use of a POS code should not be the 
basis for reducing payments and that many codes would experience a 
significant payment change. The commenter noted that a 1.0 RVU 
reduction would result in a $36 payment reduction for the service. One 
commenter stated CMS should propose budget neutral PE and originating 
site fees, based on data, for CY 2018. One commenter noted that there 
are no facility PE RVUs for several codes.

[[Page 80201]]

    Response: We do not believe that use of the telehealth POS code 
produces a significant payment change in the vast majority of 
circumstances. For distant site practitioners who are already paid 
using the facility PE RVUs and for services where there is no payment 
difference between the facility and non-facility PE RVUs, there will be 
no change in payment as a result of the telehealth POS code.
    There is utilization data for 56 of the 81 codes on the telehealth 
list. For these codes, 20 are not paid differently based on site of 
service, and 27 codes are paid differently by fewer than 0.5 RVUs. 
There are only three codes on the telehealth list with a difference 
greater than 1.0 PE RVUs between the facility PE RVUs and the non-
facility PE RVUs.
    Concerning psychotherapy and psychological testing services, we 
note that for the vast majority of psychiatric services the difference 
between the two rates is very small. For example, the difference 
between the facility and non-facility national rates for 45 minutes of 
psychotherapy is 0.02 RVUs per service: Less than $1.00. The 
differences between the facility PE RVUs and non-facility PE RVUS 
ranges from 0.01-0.03 RVUs for nine of the psychological testing codes 
on the Medicare telehealth list, and 0.12 RVUs lower for two other 
codes. We do not consider these reductions significant, nor do we have 
any evidence that practice expense costs are greater for furnishing 
such services via telehealth than for furnishing a face-to-face 
service. Commenters provided no evidence that practice expense costs 
for services furnished via telehealth are greater, due to the 
requirement for HIPAA-compliant equipment, than for furnishing in-
person services, even in the facility setting.
    There are a few HCPCS codes on the telehealth list that do not have 
a calculated facility PE RVU. For these services, the non-facility PE 
RVUs would serve as a proxy, and therefore, there would be no payment 
change for these codes.
    Finally, we note that the originating site facility fee is 
established by statute (section 1834(m)(2)(B) of the Act) and is not 
affected by this proposal.
    We note that we believe that payment using the facility PE RVUs for 
telehealth services is consistent our belief that the direct practice 
expense costs are generally incurred at the location of the beneficiary 
and not by the distant site practitioner. After reviewing the current 
list of telehealth services in the context of the comments, we continue 
to believe this is accurate.
    After consideration of the public comments received, we are 
finalizing our proposal to use the POS code for telehealth and to use 
the facility PE RVUs to pay for telehealth service reported by 
physicians or practitioners with the telehealth POS code for CY 2017. 
However, we understand commenters' concerns and will consider the 
concerns regarding use of the facility payment rate as we monitor 
utilization of telehealth services. We will welcome information from 
stakeholders regarding any potential unintended consequences of the 
payment policy. We will also consider the applicability of the facility 
rate to any codes newly added to the list of telehealth services.
    We have updated the POS code list on our Web site at https://www.cms.gov/Medicare/Coding/place-of-service-codes/Place_of_Service_Code_Set.html to include POS 02: Telehealth 
(Descriptor: The location where health services and health related 
services are provided or received, through telecommunication 
technology). The new code will be used for services furnished on or 
after January 1, 2017.
    We are finalizing proposed revisions to our regulation at Sec.  
414.22(b)(5)(i)(A) that addresses the PE RVUs used in different 
settings as described above, except that we are not finalizing the 
proposed change that would have resulted in the payment of the 
nonfacility rate for services furnished in off-campus provider based 
departments that are not excepted under Section 603 of the Bipartisan 
Budget Act of 2015 since we are finalizing that payments to such non-
excepted PBDs will be made under the PFS. In a separate interim final 
rule with comment period issued in conjunction with the CY 2017 OPPS/
ASC final rule with comment period (see Medicare Program: Hospital 
Outpatient Prospective Payment and Ambulatory Surgical Center Payment 
Systems and Quality Reporting Programs; Organ Procurement Organization 
Reporting and Communication; Transplant Outcome Measures and 
Documentation Requirements; Electronic Health Record (EHR) Incentive 
Programs; Payment to Certain Off-Campus Outpatient Departments of a 
Provider; Hospital Value-Based Purchasing (VBP) Program; Establishment 
of Physician Fee Schedule Payment Rates for Nonexcepted Items and 
Services Billed by Applicable Departments of a Hospital), we are 
finalizing other payment policies for nonexcepted items and services 
furnished by such non-excepted off-campus provider based departments. 
Accordingly, physicians furnishing services in such provider-based 
departments will continue to be paid the facility rate. We are also 
finalizing the proposal to delete Sec.  414.32 of our regulation that 
refers to the calculation of payments for certain services prior to 
2002.
    We remind the public that we are currently soliciting requests to 
add services to the list of Medicare telehealth services. To be 
considered during PFS rulemaking for CY 2018, these requests must be 
submitted and received by December 31, 2016. Each request to add a 
service to the list of Medicare telehealth services must include any 
supporting documentation the requester wishes us to consider as we 
review the request. For more information on submitting a request for an 
addition to the list of Medicare telehealth services, including where 
to mail these requests, we refer readers to the CMS Web site at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
5. Telehealth Originating Site Facility Fee Payment Amount Update
    Section 1834(m)(2)(B) of the Act establishes the Medicare 
telehealth originating site facility fee for telehealth services 
furnished from October 1, 2001 through December 31, 2002, at $20.00. 
For telehealth services furnished on or after January 1 of each 
subsequent calendar year, the telehealth originating site facility fee 
is increased by the percentage increase in the MEI as defined in 
section 1842(i)(3) of the Act. The originating site facility fee for 
telehealth services furnished in CY 2016 is $25.10. The MEI increase 
for 2017 is 1.2 percent and is based on the most recent historical 
update through 2016Q2 (1.6 percent), and the most recent historical MFP 
through calendar year 2015 (0.4 percent). Therefore, for CY 2017, the 
payment amount for HCPCS code Q3014 (Telehealth originating site 
facility fee) is 80 percent of the lesser of the actual charge or 
$25.40. The Medicare telehealth originating site facility fee and the 
MEI increase by the applicable time period is shown in Table 6.

 Table 6--The Medicare Telehealth Originating Site Facility Fee and MEI
                [Increase by the applicable time period]
------------------------------------------------------------------------
                                                       MEI      Facility
                    Time period                      increase     fee
------------------------------------------------------------------------
10/01/2001-12/31/2002.............................        N/A     $20.00
01/01/2003-12/31/2003.............................        3.0      20.60
01/01/2004-12/31/2004.............................        2.9      21.20
01/01/2005-12/31/2005.............................        3.1      21.86
01/01/2006-12/31/2006.............................        2.8      22.47
01/01/2007-12/31/2007.............................        2.1      22.94
01/01/2008-12/31/2008.............................        1.8      23.35
01/01/2009-12/31/2009.............................        1.6      23.72

[[Page 80202]]

 
01/01/2010-12/31/2010.............................        1.2      24.00
01/01/2011-12/31/2011.............................        0.4      24.10
01/01/2012-12/31/2012.............................        0.6      24.24
01/01/2013-12/31/2013.............................        0.8      24.43
01/01/2014-12/31/2014.............................        0.8      24.63
01/01/2015-12/31/2015.............................        0.8      24.83
01/01/2016-12/31/2016.............................        1.1      25.10
01/01/2017-12/31/2017.............................        1.2      25.40
------------------------------------------------------------------------

D. Potentially Misvalued Services Under the Physician Fee Schedule

1. Background
    Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a 
periodic review, not less often than every 5 years, of the RVUs 
established under the PFS. Section 1848(c)(2)(K) of the Act requires 
the Secretary to periodically identify potentially misvalued services 
using certain criteria and to review and make appropriate adjustments 
to the relative values for those services. Section 1848(c)(2)(L) to the 
Act also requires the Secretary to develop a process to validate the 
RVUs of certain potentially misvalued codes under the PFS, using the 
same criteria used to identify potentially misvalued codes, and to make 
appropriate adjustments.
    As discussed in section II.B. of this final rule, each year we 
develop appropriate adjustments to the RVUs taking into account 
recommendations provided by the American Medical Association/Specialty 
Society Relative Value Scale Update Committee (RUC), the Medicare 
Payment Advisory Commission (MedPAC), and others. For many years, the 
RUC has provided us with recommendations on the appropriate relative 
values for new, revised, and potentially misvalued PFS services. We 
review these recommendations on a code-by-code basis and consider these 
recommendations in conjunction with analyses of other data, such as 
claims data, to inform the decision-making process as authorized by the 
law. We may also consider analyses of work time, work RVUs, or direct 
PE inputs using other data sources, such as Department of Veteran 
Affairs (VA), National Surgical Quality Improvement Program (NSQIP), 
the Society for Thoracic Surgeons (STS), and the Physician Quality 
Reporting System (PQRS) databases. In addition to considering the most 
recently available data, we also assess the results of physician 
surveys and specialty recommendations submitted to us by the RUC for 
our review. We also consider information provided by other 
stakeholders. We conduct a review to assess the appropriate RVUs in the 
context of contemporary medical practice. We note that section 
1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and 
other techniques to determine the RVUs for physicians' services for 
which specific data are not available and requires us to take into 
account the results of consultations with organizations representing 
physicians who provide the services. In accordance with section 1848(c) 
of the Act, we determine and make appropriate adjustments to the RVUs.
    In its March 2006 Report to the Congress (http://www.medpac.gov/documents/reports/Mar06_EntireReport.pdf?sfvrsn=0), MedPAC discussed 
the importance of appropriately valuing physicians' services, noting 
that misvalued services can distort the market for physicians' 
services, as well as for other health care services that physicians 
order, such as hospital services. In that same report MedPAC postulated 
that physicians' services under the PFS can become misvalued over time. 
MedPAC stated, ``When a new service is added to the physician fee 
schedule, it may be assigned a relatively high value because of the 
time, technical skill, and psychological stress that are often required 
to furnish that service. Over time, the work required for certain 
services would be expected to decline as physicians become more 
familiar with the service and more efficient in furnishing it.'' We 
believe services can also become overvalued when PE declines. This can 
happen when the costs of equipment and supplies fall, or when equipment 
is used more frequently than is estimated in the PE methodology, 
reducing its cost per use. Likewise, services can become undervalued 
when physician work increases or PE rises.
    As MedPAC noted in its March 2009 Report to Congress (http://www.medpac.gov/documents/reports/march-2009-report-to-congress-medicare-payment-policy.pdf?sfvrsn=0), in the intervening years since 
MedPAC made the initial recommendations, CMS and the RUC have taken 
several steps to improve the review process. Also, section 
1848(c)(2)(K)(ii) of the Act augments our efforts by directing the 
Secretary to specifically examine, as determined appropriate, 
potentially misvalued services in the following categories:
     Codes that have experienced the fastest growth.
     Codes that have experienced substantial changes in 
practice expenses.
     Codes that describe new technologies or services within an 
appropriate time period (such as 3 years) after the relative values are 
initially established for such codes.
     Codes which are multiple codes that are frequently billed 
in conjunction with furnishing a single service.
     Codes with low relative values, particularly those that 
are often billed multiple times for a single treatment.
     Codes that have not been subject to review since 
implementation of the fee schedule.
     Codes that account for the majority of spending under the 
physician fee schedule.
     Codes for services that have experienced a substantial 
change in the hospital length of stay or procedure time.
     Codes for which there may be a change in the typical site 
of service since the code was last valued.
     Codes for which there is a significant difference in 
payment for the same service between different sites of service.
     Codes for which there may be anomalies in relative values 
within a family of codes.
     Codes for services where there may be efficiencies when a 
service is furnished at the same time as other services.
     Codes with high intra-service work per unit of time.
     Codes with high practice expense relative value units.
     Codes with high cost supplies.
     Codes as determined appropriate by the Secretary.
    Section 1848(c)(2)(K)(iii) of the Act also specifies that the 
Secretary may use existing processes to receive recommendations on the 
review and appropriate adjustment of potentially misvalued services. In 
addition, the Secretary may conduct surveys, other data collection 
activities, studies, or other analyses, as the Secretary determines to 
be appropriate, to facilitate the review and appropriate adjustment of 
potentially misvalued services. This section also authorizes the use of 
analytic contractors to identify and analyze potentially misvalued 
codes, conduct surveys or collect data, and make recommendations on the 
review and appropriate adjustment of potentially misvalued services. 
Additionally, this section provides that the Secretary may coordinate 
the review and adjustment of

[[Page 80203]]

any RVU with the periodic review described in section 1848(c)(2)(B) of 
the Act. Section 1848(c)(2)(K)(iii)(V) of the Act specifies that the 
Secretary may make appropriate coding revisions (including using 
existing processes for consideration of coding changes) that may 
include consolidation of individual services into bundled codes for 
payment under the physician fee schedule.
2. Progress in Identifying and Reviewing Potentially Misvalued Codes
    To fulfill our statutory mandate, we have identified and reviewed 
numerous potentially misvalued codes as specified in section 
1848(c)(2)(K)(ii) of the Act, and we plan to continue our work 
examining potentially misvalued codes in these areas over the upcoming 
years. As part of our current process, we identify potentially 
misvalued codes for review, and request recommendations from the RUC 
and other public commenters on revised work RVUs and direct PE inputs 
for those codes. The RUC, through its own processes, also identifies 
potentially misvalued codes for review. Through our public nomination 
process for potentially misvalued codes established in the CY 2012 PFS 
final rule with comment period, other individuals and stakeholder 
groups submit nominations for review of potentially misvalued codes as 
well.
    Since CY 2009, as a part of the annual potentially misvalued code 
review and Five-Year Review process, we have reviewed over 1,671 
potentially misvalued codes to refine work RVUs and direct PE inputs. 
We have assigned appropriate work RVUs and direct PE inputs for these 
services as a result of these reviews. A more detailed discussion of 
the extensive prior reviews of potentially misvalued codes is included 
in the CY 2012 PFS final rule with comment period (76 FR 73052 through 
73055). In the CY 2012 PFS final rule with comment period, we finalized 
our policy to consolidate the review of physician work and PE at the 
same time (76 FR 73055 through 73958), and established a process for 
the annual public nomination of potentially misvalued services.
    In the CY 2013 PFS final rule with comment period, we built upon 
the work we began in CY 2009 to review potentially misvalued codes that 
have not been reviewed since the implementation of the PFS (so-called 
``Harvard-valued codes''). In CY 2009, we requested recommendations 
from the RUC to aid in our review of Harvard-valued codes that had not 
yet been reviewed, focusing first on high-volume, low intensity codes 
(73 FR 38589). In the fourth Five-Year Review (76 FR 32410), we 
requested recommendations from the RUC to aid in our review of Harvard-
valued codes with annual utilization of greater than 30,000. In the CY 
2013 PFS final rule with comment period, we identified specific 
Harvard-valued services with annual allowed charges that total at least 
$10,000,000 as potentially misvalued. In addition to the Harvard-valued 
codes, in the CY 2013 PFS final rule with comment period we finalized 
for review a list of potentially misvalued codes that have stand-alone 
PE (codes with physician work and no listed work time and codes with no 
physician work that have listed work time).
    In the CY 2016 PFS final rule with comment period, we finalized for 
review a list of potentially misvalued services, which included eight 
codes in the neurostimulators analysis-programming family (CPT 95970-
95982). We also finalized as potentially misvalued 103 codes identified 
through our screen of high expenditure services across specialties.
3. Validating RVUs of Potentially Misvalued Codes
    Section 1848(c)(2)(L) of the Act requires the Secretary to 
establish a formal process to validate RVUs under the PFS. The Act 
specifies that the validation process may include validation of work 
elements (such as time, mental effort and professional judgment, 
technical skill and physical effort, and stress due to risk) involved 
with furnishing a service and may include validation of the pre-, post-
, and intra-service components of work. The Secretary is directed, as 
part of the validation, to validate a sampling of the work RVUs of 
codes identified through any of the 16 categories of potentially 
misvalued codes specified in section 1848(c)(2)(K)(ii) of the Act. 
Furthermore, the Secretary may conduct the validation using methods 
similar to those used to review potentially misvalued codes, including 
conducting surveys, other data collection activities, studies, or other 
analyses as the Secretary determines to be appropriate to facilitate 
the validation of RVUs of services.
    In the CY 2011 PFS proposed rule (75 FR 40068) and CY 2012 PFS 
proposed rule (76 FR 42790), we solicited public comments on possible 
approaches, methodologies, and data sources that we should consider for 
a validation process. A summary of the comments along with our 
responses are included in the CY 2011 PFS final rule with comment 
period (75 FR 73217) and the CY 2012 PFS final rule with comment period 
(73054 through 73055).
    We contracted with two outside entities to develop validation 
models for RVUs.
    Given the central role of time in establishing work RVUs and the 
concerns that have been raised about the current time values used in 
rate setting, we contracted with the Urban Institute to develop 
empirical time estimates based on data collected from several health 
systems with multispecialty group practices. The Urban Institute 
collected data by directly observing the delivery of services and 
through the use of electronic health records for services selected by 
the contractor in consultation with CMS and is using this data to 
produce objective time estimates. We expect the final Urban Institute 
report will be made available on the CMS Web site later this year.
    The second contract is with the RAND Corporation, which used 
available data to build a validation model to predict work RVUs and the 
individual components of work RVUs, time and intensity. The model 
design was informed by the statistical methodologies and approach used 
to develop the initial work RVUs and to identify potentially misvalued 
procedures under current CMS and RUC processes. RAND consulted with a 
technical expert panel on model design issues and the test results. The 
RAND report is available under downloads on the Web site for the CY 
2015 PFS final rule with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1612-FC.html.
    After posting RAND's report on the models and results on our Web 
site, we received comments indicating that the models did not 
adequately address global surgery services due to the lack of available 
data on included visits. Therefore, we modified the RAND contract to 
include the development of G-codes that could be used to collect data 
about post-surgical follow-up visits on Medicare claims to meet the 
requirements in section 1848(c)(8)(B) of the Act regarding collection 
of data on global services. Our discussion related to this data 
collection requirement is in section II.D.6. Also, the data from this 
project would provide information that would allow the time for these 
services to be included in the model for validating RVUs.

[[Page 80204]]

4. CY 2017 Identification and Review of Potentially Misvalued Services
a. 0-Day Global Services That Are Typically Billed With an Evaluation 
and Management (E/M) Service With Modifier 25
    Because routine E/M is included in the valuation of codes with 0-, 
10-, and 90-day global periods, Medicare only makes separate payment 
for E/M services that are provided in excess of those considered 
included in the global procedure. In such cases, the physician would 
report the additional E/M service with Modifier 25, which is defined as 
a significant, separately identifiable E/M service performed by the 
same physician on the day of a procedure above and beyond other 
services provided or beyond the usual preservice and postservice care 
associated with the procedure that was performed. Modifier 25 allows 
physicians to be paid for E/M services that would otherwise be denied 
as bundled.
    In reviewing misvalued codes, both CMS and the RUC have often 
considered how frequently particular codes are reported with E/M codes 
to account for potential overlap in resources. Some stakeholders have 
expressed concern with this policy especially with regard to the 
valuation of 0-day global services that are typically billed with a 
separate E/M service with the use of Modifier 25. For example, when we 
established our valuation of the osteopathic manipulative treatment 
(OMT) services, described by CPT codes 98925-98929, we did so with the 
understanding that these codes are usually reported with E/M codes.
    For our CY 2017 proposal (81 FR 46187), we investigated Medicare 
claims data for CY 2015 and found that 19 percent of the codes that 
described 0-day global services were billed over 50 percent of the time 
with an E/M with Modifier 25. Since routine E/M is included in the 
valuation of 0-day global services, we believed that the routine 
billing of separate E/M services may have indicated a possible problem 
with the valuation of the bundle, which is intended to include all the 
routine care associated with the service.
    In the proposed rule (81 FR 46187), we stated that reviewing the 
procedure codes typically billed with an E/M with Modifier 25 may be 
one avenue to appropriate valuation for these services. Therefore, we 
developed and proposed a screen for potentially misvalued codes that 
identified 0-day global codes billed with an E/M 50 percent of the time 
or more, on the same day of service, with the same physician and same 
beneficiary. We included a list of codes with total allowed services 
greater than 20,000. There are 83 codes that met the proposed criteria 
for the screen and were proposed as potentially misvalued. We also 
sought comment regarding additional ways to address appropriate 
valuations for all services that are typically billed with an E/M with 
Modifier 25.
    The following is the summary of the comments we received.
    Comment: Several commenters disagreed with CMS' assertion that 
there is a possible valuation problem with the bundle when an E/M with 
Modifier 25 is typically reported on the same day of service as a 0-day 
global procedure. Commenters stated that billing an E/M with Modifier 
25 pays physicians for the justifiable and appropriate services they 
render to patients; allowing for a patient-centered approach to care. 
Some commenters considered the possibility that there could be 
fraudulent billing practices when reporting an E/M with Modifier 25 and 
a few offered various solutions for rectifying the problem from a 
program integrity perspective. For example, one commenter suggested 
that further education on the appropriate use of Modifier 25 or penalty 
for misuse would be effective alternatives to combat inappropriate 
billing while another commenter suggested investigating the diagnosis 
coding for services.
    Commenters overwhelmingly opposed any change to billing policies or 
standard valuation for 0-day services that are billed with an E/M with 
Modifier 25.
    Response: We appreciate commenters' perspective on this issue. 
While we understand the commenters' views, since routine E/M is 
included in the valuation of 0-day global services we continue to 
believe that the routine billing of separate E/M services may still 
indicate a possible problem with the valuation of the global period or 
the assignment of the global period for particular codes, given that 
the period is intended to include all the routine care associated with 
the service. As discussed below, we are finalizing some of the 0-day 
global services as potentially misvalued. We will also continue to 
consider this issue for future rulemaking.
    Comment: Several commenters expressed appreciation for the 
identification of an objective screen and reasonable query. While some 
commenters were accepting of the screen as proposed, others stated 
their preference for the screen to be withdrawn entirely or limited in 
scope, with some commenters suggesting the screen be limited to the 
codes that met the criteria and for which the overlap had not already 
been considered by the RUC in developing recommended values. Several 
thousand commenters suggested withdrawing or limiting the scope of this 
screen, particularly as it pertains to the OMT codes.
    Response: Section 1848(c)(2)(K) of the Act requires the Secretary 
to periodically identify potentially misvalued services and to review 
and make appropriate adjustments to the relative values for those 
services. Section 1848(c)(2)(K) of the Act identifies several 
categories of services as potentially misvalued, including codes for 
services where there may be efficiencies when a service is furnished at 
the same time as other services, along with codes as determined 
appropriate by the Secretary. Based on the comments received, we 
understand that stakeholders would have us identify as potentially 
misvalued only those individual codes with obvious overlapping resource 
costs when typically reported with an E/M, rather than consider the 
issue of misvaluation of the global period more broadly. In response to 
these comments, we are finalizing the use of our screen for 0-day 
global services that are typically billed with an E/M with Modifier 25 
as a mechanism for identifying services that are potentially misvalued.
    Because we recognize that the primary purpose in displaying lists 
of misvalued codes in rulemaking has been to seek recommendations 
regarding appropriate valuation from stakeholders, including the RUC, 
for 2017 we are only identifying the services for which we believe 
there might be the kind of misvaluation the RUC and the medical 
specialty societies recognize. Based on the comments from these 
organizations, we believe that for codes reviewed in the past 5 years, 
the RUC has already addressed that kind of misvaluation. In other 
words, commenters have made clear that external review of these 
services is likely to be limited to clear overlap in resource costs, 
but will not address the broader concerns we have about developing 
rates for services that include routine E/M when evaluation and 
management is also routinely separately reported. As a result, we will 
continue to consider that issue for future rulemaking. We note that we 
are required under statute to improve the valuation of the 10- and 90-
day global periods, and therefore, we will consider this issue in that 
context, as well.
    Comment: While some commenters supported our review of the 83 codes 
that were proposed as potentially

[[Page 80205]]

misvalued through the screen, the majority of commenters, including the 
RUC, stated that the codes detailed in Table 7 did not meet the 
criteria for the screen because they were either reviewed in the last 5 
years and/or are not typically reported with an E/M, and therefore, 
should be removed. While commenters largely disagreed on the list of 
proposed codes, most agreed that the services they believed met the 
screen criteria should be reviewed.

   Table 7--Codes Requested To Be Removed From the List of Potentially
                           Misvalued Services
------------------------------------------------------------------------
               HCPCS                           Long descriptor
------------------------------------------------------------------------
11000.............................  Removal of inflamed or infected
                                     skin, up to 10% of body surface.
11100.............................  Biopsy of single growth of skin and/
                                     or tissue.
11300.............................  Shaving of 0.5 centimeters or less
                                     skin growth of the trunk, arms, or
                                     legs.
11301.............................  Shaving of 0.6 centimeters to 1.0
                                     centimeters skin growth of the
                                     trunk, arms, or legs.
11302.............................  Shaving of 1.1 to 2.0 centimeters
                                     skin growth of the trunk, arms, or
                                     legs.
11305.............................  Shaving of 0.5 centimeters or less
                                     skin growth of scalp, neck, hands,
                                     feet, or genitals.
11306.............................  Shaving of 0.6 centimeters to 1.0
                                     centimeters skin growth of scalp,
                                     neck, hands, feet, or genitals.
11307.............................  Shaving of 1.1 to 2.0 centimeters
                                     skin growth of scalp, neck, hands,
                                     feet, or genitals.
11310.............................  Shaving of 0.5 centimeters or less
                                     skin growth of face, ears, eyelids,
                                     nose, lips, or mouth.
11311.............................  Shaving of 0.6 centimeters to 1.0
                                     centimeters skin growth of face,
                                     ears, eyelids, nose, lips, or
                                     mouth.
11312.............................  Shaving of 1.1 to 2.0 centimeters
                                     skin growth of face, ears, eyelids,
                                     nose, lips, or mouth.
11740.............................  Removal of blood accumulation
                                     between nail and nail bed.
11900.............................  Injection of up to 7 skin growths.
11901.............................  Injection of more than 7 skin
                                     growths.
12001.............................  Repair of wound (2.5 centimeters or
                                     less) of the scalp, neck,
                                     underarms, trunk, arms and/or legs.
12002.............................  Repair of wound (2.6 to 7.5
                                     centimeters) of the scalp, neck,
                                     underarms, genitals, trunk, arms
                                     and/or legs.
12004.............................  Repair of wound (7.6 to 12.5
                                     centimeters) of the scalp, neck,
                                     underarms, genitals, trunk, arms
                                     and/or legs.
12011.............................  Repair of wound (2.5 centimeters or
                                     less) of the face, ears, eyelids,
                                     nose, lips, and/or mucous
                                     membranes.
12013.............................  Repair of wound (2.6 to 5.0
                                     centimeters) of the face, ears,
                                     eyelids, nose, lips, and/or mucous
                                     membranes.
17250.............................  Application of chemical agent to
                                     excessive wound tissue.
20550.............................  Injections of tendon sheath,
                                     ligament, or muscle membrane.
20552.............................  Injections of trigger points in 1 or
                                     2 muscles.
20553.............................  Injections of trigger points in 3 or
                                     more muscles.
20600.............................  Aspiration and/or injection of small
                                     joint or joint capsule.
20604.............................  Arthrocentesis, aspiration and/or
                                     injection, small joint or bursa
                                     (eg, fingers, toes); with
                                     ultrasound guidance, with permanent
                                     recording and reporting.
20605.............................  Aspiration and/or injection of
                                     medium joint or joint capsule.
20606.............................  Arthrocentesis, aspiration and/or
                                     injection, intermediate joint or
                                     bursa (eg, temporomandibular,
                                     acromioclavicular, wrist, elbow or
                                     ankle, olecranon bursa); with
                                     ultrasound guidance, with permanent
                                     recording and reporting.
20610.............................  Aspiration and/or injection of large
                                     joint or joint capsule.
20611.............................  Arthrocentesis, aspiration and/or
                                     injection, major joint or bursa
                                     (eg, shoulder, hip, knee,
                                     subacromial bursa); with ultrasound
                                     guidance, with permanent recording
                                     and reporting.
20612.............................  Aspiration and/or injection of
                                     cysts.
29125.............................  Application of non-moveable, short
                                     arm splint (forearm to hand).
29515.............................  Application of short leg splint
                                     (calf to foot).
30901.............................  Simple control of nose bleed.
30903.............................  Complex control of nose bleed.
31231.............................  Diagnostic examination of nasal
                                     passages using an endoscope.
31238.............................  Control of nasal bleeding using an
                                     endoscope.
31500.............................  Emergent insertion of breathing tube
                                     into windpipe cartilage using an
                                     endoscope.
31575.............................  Diagnostic examination of voice box
                                     using flexible endoscope.
31579.............................  Examination to assess movement of
                                     vocal cord flaps using an
                                     endoscope.
31645.............................  Aspiration of lung secretions from
                                     lung airways using an endoscope.
32551.............................  Removal of fluid from between lung
                                     and chest cavity, open procedure.
32554.............................  Removal of fluid from chest cavity.
40490.............................  Biopsy of lip.
46600.............................  Diagnostic examination of the anus
                                     using an endoscope.
51701.............................  Insertion of temporary bladder
                                     catheter.
51702.............................  Insertion of indwelling bladder
                                     catheter.
51703.............................  Insertion of indwelling bladder
                                     catheter.
56605.............................  Biopsy of external female genitals.
57150.............................  Irrigation of vagina and/or
                                     application of drug to treat
                                     infection.
57160.............................  Fitting and insertion of vaginal
                                     support device.
58100.............................  Biopsy of uterine lining.
64418.............................  Injection of anesthetic agent,
                                     collar bone nerve.
65222.............................  Removal of foreign body, external
                                     eye, cornea with slit lamp
                                     examination.
67810.............................  Biopsy of eyelid.
67820.............................  Removal of eyelashes by forceps.
68200.............................  Injection into conjunctiva.
69100.............................  Biopsy of ear.
69200.............................  Removal of foreign body from ear
                                     canal.
69210.............................  Removal of impact ear wax, one ear.
69220.............................  Removal of skin debris and drainage
                                     of mastoid cavity.
92511.............................  Examination of the nose and throat
                                     using an endoscope.
92941.............................  Insertion of stent, removal of
                                     plaque and/or balloon dilation of
                                     coronary vessel during heart
                                     attack, accessed through the skin.
92950.............................  Attempt to restart heart and lungs.

[[Page 80206]]

 
98925.............................  Osteopathic manipulative treatment
                                     to 1-2 body regions.
98926.............................  Osteopathic manipulative treatment
                                     to 3-4 body regions.
98927.............................  Osteopathic manipulative treatment
                                     to 5-6 body regions.
98928.............................  Osteopathic manipulative treatment
                                     to 7-8 body regions.
98929.............................  Osteopathic manipulative treatment
                                     to 9-10 body regions.
------------------------------------------------------------------------

    Response: After considering the comments received, we are 
significantly reducing the number of codes identified as potentially 
misvalued. We agree with commenters that the majority of the codes that 
we are not finalizing have been recently reviewed. Due to a drafting 
error in the proposed rule, we stated that we had exempted codes that 
had been reviewed in the past 5 years. While that exclusion has been 
standard for many other misvalued code screens, we did not intend to 
apply it in this case, given our concerns with the valuation of the 
global period when E/M visits are routinely reported at the same time. 
As displayed in the proposed rule, the list of codes reflected our 
intention to include codes that have been recently reviewed. 
Regardless, we understand based on comments that any review by 
stakeholders for recently reviewed codes would be likely to result in 
similar valuation. Therefore, we do not believe that we should include 
codes reviewed in the past 5 years on this list of misvalued codes, 
given the limited nature of the likely review. Regarding the accuracy 
of which of the codes are typically reported with E/M codes, we note 
that our review included analysis was based on more recent, full claims 
data than had yet been made public. In the interest of transparency, we 
are finalizing the list of services based on the publically available 
data.

 Table 8--List of Potentially Misvalued Services Identified Through the
   Screen for 0-Day Global Services That Are Typically Billed With an
        Evaluation and Management (E/M) Service With Modifier 25
------------------------------------------------------------------------
               HCPCS                           Long descriptor
------------------------------------------------------------------------
11755.............................  Biopsy of finger or toe nail.
20526.............................  Injection of carpal tunnel.
20551.............................  Injections of tendon attachment to
                                     bone.
20612.............................  Aspiration and/or injection of
                                     cysts.
29105.............................  Application of long arm splint
                                     (shoulder to hand).
29540.............................  Strapping of ankle and/or foot.
29550.............................  Strapping of toes.
43760.............................  Change of stomach feeding, accessed
                                     through the skin.
45300.............................  Diagnostic examination of rectum and
                                     large bowel using an endoscope.
57150.............................  Irrigation of vagina and/or
                                     application of drug to treat
                                     infection.
57160.............................  Fitting and insertion of vaginal
                                     support device.
58100.............................  Biopsy of uterine lining.
64405.............................  Injection of anesthetic agent,
                                     greater occipital nerve.
64455.............................  Injections of anesthetic and/or
                                     steroid drug into nerve of foot.
65205.............................  Removal of foreign body in external
                                     eye, conjunctiva.
65210.............................  Removal of foreign body in external
                                     eye, conjunctiva or sclera.
67515.............................  Injection of medication or substance
                                     into membrane covering eyeball.
G0168.............................  Wound closure utilizing tissue
                                     adhesive(s) only.
G0268.............................  Removal of impacted cerumen (one or
                                     both ears) by physician on same
                                     date of service as audiologic
                                     function testing.
------------------------------------------------------------------------

b. End-Stage Renal Disease Home Dialysis Services (CPT Codes 90963 
Through 90970)
    In the CY 2004 PFS final rule with comment period (68 FR 63216), we 
established new Level II HCPCS G-codes for end-stage renal disease 
(ESRD) services and established payment for those codes through monthly 
capitation payment (MCP) rates. For ESRD center-based patients, payment 
for the G-codes varied based on the age of the beneficiary and the 
number of face-to-face visits furnished each month (for example, 1 
visit, 2-3 visits and 4 or more visits). We believed that many 
physicians would provide 4 or more visits to center-based ESRD patients 
and a small proportion will provide 2-3 visits or only one visit per 
month. Under the MCP methodology, to receive the highest payment, a 
physician would have to provide at least four ESRD-related visits per 
month. However, payment for home dialysis MCP services only varied by 
the age of beneficiary. Although we did not initially specify a 
frequency of required visits for home dialysis MCP services, we stated 
that we expect physicians to provide clinically appropriate care to 
manage the home dialysis patient.
    The CPT Editorial Panel created new CPT codes to replace the G-
codes for monthly ESRD-related services, and we accepted the new codes 
for use under the PFS in CY 2009. The CPT codes created were 90963-
90966 for monthly ESRD-related services for home dialysis patient and 
CPT codes 90967-90970 for dialysis with less than a full month of 
services.
    In a GAO report titled ``END-STAGE RENAL DISEASE Medicare Payment 
Refinements Could Promote Increased Use of Home Dialysis'' dated 
October 2015, http://www.gao.gov/products/GAO-16-125, the GAO stated 
that experts and stakeholders they interviewed indicated that home 
dialysis could be clinically appropriate for at least half of patients. 
Also, at a meeting in 2013, the chief medical officers of 14 dialysis 
facility chains jointly estimated that a realistic target for home 
dialysis would be 25 percent of dialysis patients. The GAO noted that 
CMS data showed that about 10 percent of adult Medicare dialysis 
patients use home dialysis as of March 2015.

[[Page 80207]]

    In the report, the GAO noted that CMS intended for the existing 
payment structure to create an incentive for physicians to prescribe 
home dialysis, because the monthly payment rate for managing the 
dialysis care of home patients, which requires a single in-person 
visit, was approximately equal to the rate for managing and providing 
two to three visits to ESRD center-based patients. However, GAO found 
that, in 2013, the rate of $237 for managing home patients was lower 
than the average payment of $266 and maximum payment of $282 for 
managing ESRD center-based patients. The GAO stated that this 
difference in payment rates may discourage physicians from prescribing 
home dialysis.
    Physician associations and other physicians GAO interviewed stated 
that the visits with home patients are often longer and more 
comprehensive than in-center visits; this is in part because physicians 
may conduct visits with individual home patients in a private setting, 
but they may be able to more easily visit multiple in-center patients 
on a single day as they receive dialysis. The physician associations 
GAO interviewed also said that they may spend a similar amount of time 
outside of visits to manage the care of home patients and that they are 
required to provide at least one visit per month to perform a complete 
assessment of the patient.
    It is important to note that, as stated in the CY 2011 PFS final 
rule with comment period (75 FR 73296), we believe that furnishing 
monthly face-to-face visits is an important component of high quality 
medical care for ESRD patients being dialyzed at home and generally 
would be consistent with the current standards of medical practice. 
However, we also acknowledged that extenuating circumstances may arise 
that make it difficult for the MCP physician (or NPP) to furnish a 
visit to a home dialysis patient every month. Therefore, we allow 
Medicare contractors the discretion to waive the requirement for a 
monthly face-to-face visit for the home dialysis MCP service on a case-
by-case basis, for example, when the MCP physician's (or NPP's) notes 
indicate that the MCP physician (or NPP) actively and adequately 
managed the care of the home dialysis patient throughout the month.
    The GAO recommended, and we agreed, that CMS examine Medicare 
policies for monthly payments to physicians to manage the care of 
dialysis patients and revise them if necessary to ensure that these 
policies are consistent with our goal of encouraging the use of home 
dialysis among patients for whom it is appropriate. Therefore, we 
proposed to identify CPT codes 90963 through 90970 as potentially 
misvalued codes based on the volume of claims submitted for these 
services relative to those submitted for facility ESRD services.
    The following is summary of the comments we received.
    Comment: Commenters supported the proposal to identify these codes 
as potentially misvalued and supported CMS' goal of encouraging the use 
of home dialysis among patients for whom it is appropriate. Some 
commenters suggested we establish parity between payment for four ESRD-
related visits per month for in-center dialysis patients and payment 
for the care of home dialysis patients for an entire month. One 
commenter cautioned that CMS should also consider factors other than 
payment that play a critical role in whether a patient decides to use a 
home dialysis modality as outlined in a recent GAO report and requested 
that CMS work closely with nephrologists on this issue. One commenter 
encouraged CMS to focus on incentives for the adult population 
separately from pediatrics as they see no benefit from reanalysis of 
the pediatric home and daily dialysis CPT codes 90963-90965 and 90967-
90969.
    Response: We appreciate all of the comments and agree that CPT 
codes 90963 through 90970 should be identified as potentially 
misvalued. After considering the comments, we are finalizing the 
addition of CPT codes 90963 through 90970 to the list of potentially 
misvalued codes. We will also continue to consider these issues for 
future rulemaking.
c. Direct PE Input Discrepancies
i. Appropriate Direct PE Inputs Involved in Procedures Involving 
Endoscopes
    In the proposed rule (81 FR 46190), we stated that stakeholders had 
raised concerns about potential inconsistencies with the inputs and the 
prices related to endoscopic procedures in the direct PE database. Upon 
review, we noted that there are 45 different pieces of endoscope 
related-equipment and 25 different pieces of endoscope related-supplies 
that are currently associated with these services. Relative to other 
kinds of equipment items in the direct PE input, these items are much 
more varied and used for many fewer services. Given the frequency with 
which individual codes can be reviewed and the importance of 
standardizing inputs for purposes of maintaining relativity across PFS 
services, we believed that this unusual degree of variation was likely 
to result in code misvaluation. To facilitate efficient review of this 
particular kind of misvaluation, and because we believed that 
stakeholders would prefer the opportunity to contribute to such 
standardization, we requested that stakeholders like the AMA RUC review 
and make recommendations on the appropriate endoscopic equipment and 
supplies typically provided in all endoscopic procedures for each 
anatomical body region, along with their appropriate prices.
    The following is summary of the comments we received.
    Comment: Many commenters stated that the RUC is the appropriate 
resource for the review of appropriate direct PE inputs involved in 
procedures involving endoscopes and urged CMS to work with the RUC to 
address this issue. Additionally, the RUC stated that due to the 
complexity of this issue and the need to incorporate input from various 
specialty societies that the RUC planned to form a workgroup of the PE 
subcommittee to review the issue.
    Response: We appreciate the comments and will review any 
recommendation provided to us by the RUC for use in future rulemaking, 
consistent with our normal review processes.
ii. Appropriate Direct PE Inputs in the Facility Post-Service Period 
When Post-Operative Visits Are Excluded
    In the proposed rule (81 FR 46190), we identified a potential 
inconsistency in instances where there are direct PE inputs included in 
the facility postservice period even though post-operative visit is not 
included in a service. We identified 13 codes affected by this issue 
and stated that we were unclear if the discrepancy was caused by 
inaccurate direct PE inputs or inaccurate post-operative data in the 
work time file. We requested that stakeholders including the AMA RUC 
review these discrepancies and provide their recommendations on the 
appropriate direct PE inputs for the codes.
    The following is summary of the comments we received.
    Comment: The RUC stated that for CPT codes 21077 (Impression and 
preparation of eye socket prosthesis), 21079 (Impression and custom 
preparation of temporary oral prosthesis), 21080 (Impression and custom 
preparation of permanent oral prosthesis), 21081 (Impression and custom 
preparation of lower jaw bone prosthesis), 21082 (Impression and custom 
preparation of prosthesis for

[[Page 80208]]

roof of mouth enlargement), 21083 (Impression and custom preparation of 
roof of mouth prosthesis), and 21084 (Impression and custom preparation 
of speech aid prosthesis) the practice expense time in the postservice 
period in the facility setting is completely distinct from the 
physician post-operative visit and that time must be accounted for the 
manufacture and fitting of the prosthetics. The RUC stated that the 
following codes all had inaccurate post-operative data in the work time 
file and provided recommendations on appropriate post-operative visits: 
CPT codes 28636 (Insertion of hardware to foot bone dislocation with 
manipulation, accessed through the skin), 28666 (Insertion of hardware 
to toe joint dislocation with manipulation, accessed through the skin), 
43652 (Incision of vagus nerves of stomach using an endoscope), 47570 
(Connection of gall bladder to bowel using an endoscope), and 66986 
(Exchange of lens prosthesis). Additionally, another commenter stated 
that CPT code 46900 (Chemical destruction of anal growths) also had 
inaccurate post-operative data in the work time file and provided a 
recommendation on the appropriate post-operative visit.
    Response: We thank stakeholders for their comments. We will review 
the recommendations provided to us by the AMA RUC and other commenters 
and will consider for future rulemaking, consistent with our normal 
review processes.
d. Insertion and Removal of Drug Delivery Implants--CPT Codes 11981 and 
11983
    In the proposed rule (81 FR 46190), we stated that stakeholders had 
urged CMS to create new coding describing the insertion and removal of 
drug delivery implants for buprenorphine hydrochloride, formulated as a 
4 rod, 80 mg, long acting subdermal drug implant for the treatment of 
opioid addiction. The stakeholders suggested that current coding 
describing insertion and removal of drug delivery implants was too 
broad and that new coding was needed to account for specific additional 
resource costs associated with particular treatment. We identified 
existing CPT codes 11981 (Insertion, non-biodegradable drug delivery 
implant), 11982 (Removal, non-biodegradable drug delivery implant), and 
11983 (Removal with reinsertion, non-biodegradable drug delivery 
implant) as potentially misvalued codes and sought comment and 
information regarding whether the current resource inputs in work and 
practice expense for the codes appropriately accounted for variations 
in the service relative to which devices and related drugs are inserted 
and removed.
    The following is summary of the comments we received.
    Comment: One commenter stated that CMS should create distinct codes 
and payment levels for a four-rod implant as opposed to the one-rod 
implant detailed in CPT codes 11981-11983. In contrast, another 
commenter stated that the identified codes adequately describe the work 
and practice expense for drug implant delivery and removal services. 
Additionally, another commenter stated the codes should be removed from 
the potentially misvalued list. The RUC stated that a coding change 
proposal had been submitted for the services under the CPT process and 
that the RUC anticipated providing relevant recommendations for CY 
2018.
    Response: We thank stakeholders for their comments. We will review 
new coding and recommended valuations for future rulemaking, consistent 
with our normal review processes.
5. Valuing Services That Include Moderate Sedation as an Inherent Part 
of Furnishing the Procedure
    The CPT manual identifies more than 400 diagnostic and therapeutic 
procedures (listed in Appendix G) for which the CPT Editorial Panel has 
determined that moderate sedation is an inherent part of furnishing the 
procedure. In developing RVUs for these services, we include the 
relative resources associated with moderate sedation in the valuation 
since the CPT codes include moderate sedation as an inherent part of 
the procedure. Therefore, practitioners only report the procedure code 
when furnishing the service. Endoscopic procedures constitute a 
significant portion of the services identified in Appendix G. In the CY 
2015 PFS proposed rule (79 FR 40349), we noted that it appeared that 
practice patterns for endoscopic procedures were changing, with 
anesthesia increasingly being separately reported for these procedures, 
meaning that the relative resources associated with sedation were no 
longer incurred by the practitioner reporting the Appendix G procedure. 
We indicated that, in order to reflect apparent changes in medical 
practice, we were considering establishing a uniform approach to the 
appropriate valuation of all Appendix G services for which moderate 
sedation is no longer inherent, rather than addressing the issue at the 
procedure level as individual codes are revalued. We solicited public 
comment on approaches to the appropriate valuation of these services.
    In the CY 2016 PFS proposed rule (80 FR 41707), we again solicited 
public comment and recommendations on approaches to address the 
appropriate valuation of moderate sedation related to Appendix G 
services. Following our comment solicitation, the CPT Editorial Panel 
created CPT codes for separately reporting moderate sedation services 
in association with the elimination of Appendix G from the CPT manual 
for CY 2017. This coding change would provide for payment for moderate 
sedation services only in cases where they are furnished. In addition 
to providing recommended values for the new codes used to separately 
report moderate sedation, the RUC provided a methodology for revaluing 
all services previously identified in Appendix G, without moderate 
sedation, in order to make appropriate corresponding adjustments for 
the procedural services. The RUC recommended this methodology to 
address moderate sedation valuation generally instead of recommending 
that it be addressed as individual codes are reviewed. The RUC's 
recommended methodology would remove work RVUs for moderate sedation 
from Appendix G codes based on a code-level assessment of whether the 
procedures are typically furnished to straightforward patients or more 
difficult patients. Based on its recommended methodology, the RUC 
recommended removal of fewer RVUs from each of the procedural services 
than it recommended for valuing the moderate sedation services. If we 
were to use the RUC-recommended values for both the moderate sedation 
codes and the Appendix G procedural codes without refinement, overall 
payments for these procedures, when moderate sedation is furnished, 
would increase relative to the current payment.
    We direct readers to section II.L. of this final rule, which 
includes more detail regarding our valuation of the new moderate 
sedation codes, our methodology for revaluation of the procedural codes 
previously identified in Appendix G, and discussion and responses to 
the public comments we received regarding our proposal. We believe that 
the RVUs assigned under the PFS should reflect the overall relative 
resources of PFS services, regardless of how many codes are used to 
report the services. Therefore, our methodology for valuation of 
Appendix G procedural services maintains current resource assumptions 
for the procedures when furnished with moderate sedation and 
redistributes the RVUs associated with moderate sedation (previously

[[Page 80209]]

included in the Appendix G procedural codes) to other PFS services. We 
believe that this methodology for revaluation of Appendix G services 
without moderate sedation is consistent with our general principle that 
the overall relative resources for the procedures do not change based 
solely on changes in coding.
    We also noted in the CY 2017 PFS proposed rule that stakeholders 
presented information to CMS regarding specialty group survey data for 
physician work. The stakeholders shared survey results for physician 
work involved in furnishing moderate sedation that demonstrated a 
significant bimodal distribution between procedural services furnished 
by gastroenterologists (GI) and procedural services furnished by other 
specialties. Since we believe that gastroenterologists furnish the 
highest volume of services previously identified in Appendix G, and 
services primarily furnished by gastroenterologists prompted the 
concerns that led to our identification of changes in medical practice 
and potentially duplicative payment for these codes, we have addressed 
the variations between GI and other specialties in our review of the 
new moderate sedation CPT codes and their recommended values. We again 
direct readers to section II.L. of this final rule where we discuss our 
establishment of an endoscopy-specific moderate sedation G-code that 
augments the new CPT codes for moderate sedation, the public comments 
we received, and our finalized valuations reflecting the differences in 
the physician survey data between GI and other specialties.
6. Collecting Data on Resources Used in Furnishing Global Services
a. Background
(1) Current Payment Policy for Global Packages
    Under the PFS, certain services, such as surgery, are valued and 
paid for as part of global packages that include the procedure and the 
services typically furnished in the periods immediately before and 
after the procedure. For each of these global packages, we establish a 
single PFS payment that includes payment for particular services that 
we assume to be typically furnished during the established global 
period. There are three primary categories of global packages that are 
labeled based on the number of post-operative days included in the 
global period: 0-day; 10-day; and 90-day. The 0-day global packages 
include the surgical procedure and the pre-operative and post-operative 
services furnished by the physician on the day of the service. The 10-
day global packages include these services and, in addition, visits 
related to the procedure during the 10 days following the day of the 
procedure. The 90-day global packages include the same services as the 
0-day global codes plus the pre-operative services furnished one day 
prior to the procedure and post-operative services during the 90 days 
immediately following the day of the procedure. Section 40.1 of Chapter 
12 of the Claims Processing Manual (Pub. 100-04) defines the global 
surgical package to include the following services related to the 
surgery when furnished during the global period by the same physician 
or another practitioner in the same group practice:
     Pre-operative Visits: Pre-operative visits after the 
decision is made to operate beginning with the day before the day of 
surgery for major procedures and the day of surgery for minor 
procedures;
     Intra-operative Services: Intra-operative services that 
are normally a usual and necessary part of a surgical procedure;
     Complications Following Surgery: All additional medical or 
surgical services required of the surgeon during the post-operative 
period of the surgery because of complications that do not require 
additional trips to the operating room;
     Post-operative Visits: Follow-up visits during the post-
operative period of the surgery that are related to recovery from the 
surgery;
     Post-surgical Pain Management: By the surgeon; and
     Miscellaneous Services: Items such as dressing changes; 
local incisional care; removal of operative pack; removal of cutaneous 
sutures and staples, lines, wires, tubes, drains, casts, and splints; 
insertion, irrigation and removal of urinary catheters, routine 
peripheral intravenous lines, nasogastric and rectal tubes; and changes 
and removal of tracheostomy tubes.
    In the CY 2015 PFS proposed and final rules we extensively 
discussed the problems with accurate valuation of 10- and 90-day global 
packages. Our concerns included the fact that we do not use actual data 
on services furnished to update the rates, questions regarding the 
accuracy of our current assumptions about typical services, whether we 
will be able to adjust values on a regular basis to reflect changes in 
the practice of medicine and health care delivery, and how our global 
payment policies affect what services are actually furnished (79 FR 
67582 through 67585). In finalizing a policy to transform all 10- and 
90-day global codes to 0-day global codes in CY 2017 and CY 2018, 
respectively, to improve the accuracy of valuation and payment for the 
various components of global packages, including pre- and post-
operative visits and the procedure itself, we stated that we were 
adopting this policy because it is critical that PFS payment rates be 
based upon RVUs that reflect the relative resources involved in 
furnishing the services. We also stated our belief that transforming 
all 10- and 90-day global codes to 0-day global packages would:
     Increase the accuracy of PFS payment by setting payment 
rates for individual services that more closely reflect the typical 
resources used in furnishing the procedures;
     Avoid potentially duplicative or unwarranted payments when 
a beneficiary receives post-operative care from a different 
practitioner during the global period;
     Eliminate disparities between the payment for E/M services 
in global periods and those furnished individually;
     Maintain the same-day packaging of pre- and post-operative 
physicians' services in the 0-day global packages; and
     Facilitate the availability of more accurate data for new 
payment models and quality research.
(2) Data Collection & Revaluation of Global Packages Required by MACRA
    Section 523(a) of the Medicare Access and CHIP Reauthorization Act 
of 2015 (MACRA) (Pub. L. 114-10, enacted April 16, 2015) added section 
1848(c)(8)(A) of the Act, which prohibits the Secretary from 
implementing the policy, described above, that would have transformed 
all 10-day and 90-day global surgery packages to 0-day global packages.
    Section 1848(c)(8)(B) of the Act, which was also added by section 
523(a) of the MACRA, requires us to collect data to value surgical 
services. Section 1848(c)(8)(B)(i) of the Act requires us to develop, 
through rulemaking, a process to gather information needed to value 
surgical services from a representative sample of physicians, and 
requires that the data collection begin no later than January 1, 2017. 
The collected information must include the number and level of medical 
visits furnished during the global period and other items and services 
related to the surgery and furnished during the global period, as 
appropriate. This information must be reported on claims at the end of 
the global period or in another manner specified by the Secretary. 
Section 1848(c)(8)(B)(ii) of the Act requires that,

[[Page 80210]]

every 4 years, we reassess the value of this collected information; and 
allows us to discontinue the collection of this information if the 
Secretary determines that we have adequate information from other 
sources to accurately value global surgical services. Section 
1848(c)(8)(B)(iii) of the Act specifies that the Inspector General 
shall audit a sample of the collected information to verify its 
accuracy. Section 1848(c)(9) of the Act (added by section 523(b) of the 
MACRA) authorizes the Secretary, through rulemaking, to delay up to 5 
percent of the PFS payment for services for which a physician is 
required to report information under section 1848(c)(8)(B)(i) of the 
Act until the required information is reported.
    Section 1848(c)(8)(C) of the Act, which was also added by section 
523(a) of the MACRA, requires that, beginning in CY 2019, we must use 
the information collected as appropriate, along with other available 
data, to improve the accuracy of valuation of surgical services under 
the PFS.
(3) Public Input
    As noted above, section 1848(c)(8)(C) of the Act mandates that we 
use the collected data to improve the accuracy of valuation of surgery 
services beginning in 2019. We described in the CY 2015 PFS final rule 
(79 FR 67582 through 67591) the limitations and difficulties involved 
in the appropriate valuation of the global packages, especially when 
the resources and the related values assigned to the component services 
are not defined. To gain input from stakeholders on implementation of 
this data collection, we sought comment on various aspects of this task 
in the CY 2016 proposed rule (80 FR 41707 through 41708). We solicited 
comments from the public regarding the kinds of auditable, objective 
data (including the number and type of visits and other services 
furnished during the post-operative period by the practitioner 
furnishing the procedure) needed to increase the accuracy of the 
valuation and payment for 10- and 90-day global packages. We also 
solicited comment on the most efficient means of acquiring these data 
as accurately and efficiently as possible. For example, we sought 
information on the extent to which individual practitioners or 
practices may currently maintain their own data on services furnished 
during the post-operative period, and how we might collect and 
objectively analyze those data and use the results for increasing the 
accuracy of the values beginning in CY 2019.
    We received many comments in response to the comment solicitation 
in the CY 2016 proposed rule regarding potential methods of valuing the 
individual components of the global surgical package. A large number of 
comments expressed strong support for our proposal to hold an open door 
forum or town hall meetings with the public. In response, we held a 
national listening session on January 20, 2016. Prior to the listening 
session, the topics for which guidance was being sought were sent 
electronically to those who registered for the session and made 
available on our Web site. The topics were:
     Capturing the types of services typically furnished during 
the global period.
     Determining the representative sample for the claims-based 
data collection.
     Determining whether we should collect data on all surgical 
services or, if not, which services should be sampled.
     Potential for designing data collection elements to 
interface with existing infrastructure used to track follow-up visits 
within the global period.
     Consideration of using the 5 percent withhold until 
required information is furnished to encourage reporting.
    The 658 participants in the national listening session provided 
valuable information on this task. A written transcript and an audio 
recording of this session are available at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2016-01-20-MACRA.html.
b. Data Collection Required To Accurately Value Global Packages
    Resource-based valuation of individual physicians' services is a 
critical foundation for Medicare payment to physicians. It is essential 
that the RVUs under the PFS be based as closely and accurately as 
possible on the actual resources used in furnishing specific services 
to make appropriate payment and preserve relativity among services. For 
global surgical packages, this requires using objective data on all of 
the resources used to furnish the services that are included in the 
package. Not having such data for some components may significantly 
skew relativity and create unwarranted payment disparities within the 
PFS.
    The current valuations for many services valued as global packages 
are based upon the total package as a unit rather than by determining 
the resources used in furnishing the procedure and each additional 
service/visit and summing the results. As a result, we do not have the 
same level of information about the components of global packages as we 
do for other services. To value global packages accurately and relative 
to other procedures, we need accurate information about the resources--
work, PEs and malpractice--used in furnishing the procedure, similar to 
what is used to determine RVUs for all services. In addition we need 
the same information on the post-operative services furnished in the 
global period (and pre-operative services the day before for 90-day 
global packages). Public comments about our CY 2015 proposal to value 
all global services as 0-day global services and pay separately for 
additional post-operative services when furnished indicated that there 
were no reliable data available on the value of the underlying 
procedure that did not also incorporate the value of the post-operative 
services, reinforcing our view that more data are needed across the 
board.
    While we believe that most of the services furnished in the global 
period are visits for follow-up care, we do not have accurate 
information on the number and level of visits typically furnished 
because those billing for global services are not required to submit 
claims for post-operative visits. A May 2012 Office of Inspector 
General (OIG) report, titled Cardiovascular Global Surgery Fees Often 
Did Not Reflect the Number of Evaluation and Management Services 
Provided (http://oig.hhs.gov/oas/reports/region5/50900054.pdf) found 
that for 202 of the 300 sampled cardiovascular global surgeries, the 
Medicare payment rates were based on a number of visits that did not 
reflect the actual number of services provided. Specifically, 
physicians provided fewer services than the visits included in the 
payment calculation for 132 global surgery services and provided more 
services than were included in the payment calculations for 70 
services. Similar results were found in OIG reports titled 
``Musculoskeletal Global Surgery Fees Often Did Not Reflect The Number 
Of Evaluation And Management Services Provided'' (http://oig.hhs.gov/oas/reports/region5/50900053.asp) and ``Review of Cataract Global 
Surgeries and Related Evaluation and Management Services, Wisconsin 
Physicians Service Insurance Corporation Calendar Year 2003, March 
2007.'' (http://oig.hhs.gov/oas/reports/region5/50600040.pdf).
    Claims data plays a major role in PFS ratesetting. Specifically, 
Medicare claims data are a primary driver in the allocation of indirect 
PE RVUs and MP RVUs across the codes used by

[[Page 80211]]

particular specialties, and in making overall budget neutrality and 
relativity adjustments. In most cases, a claim must be filed for all 
visits. Such claims provide information such as the place of service, 
the type and, if relevant, the level of the service, the date of the 
service, and the specialty of the practitioner furnishing the services. 
Because we have not required claims reporting of visits included in 
global surgical packages, we do not have any of this information for 
the services bundled in the package.
    In addition to the lack of information about the number and level 
of visits actually furnished, the current global valuations rely on 
crosswalks to E/M visits, based upon the assumption that the resources, 
including work, used in furnishing pre- and post-operative visits are 
similar to those used in furnishing E/M visits. We are unaware of any 
studies or surveys that verify this assertion. Although we generally 
value the visits included in global packages using the same direct PE 
inputs as are used for E/M visits, for services for which the RUC 
recommendations include specific PE inputs in addition to those 
typically included for E/M visits, we generally use the additional 
inputs in the global package valuation. In contrast, when a visit 
included in a global package would use fewer resources than a 
comparable E/M service, the RUC generally does not include 
recommendations to decrease the PE inputs of the visit included in the 
global package, and we have not generally made comparable reductions. 
Another inconsistency with our current global package valuation 
approach is that even though we effectively assume that the E/M codes 
are appropriate for valuing pre- and post-operative services, the 
indirect PE inputs used for calculating payments for global services 
are based upon the specialty mix furnishing the global service, not the 
specialty mix of the physicians furnishing the E/M services, resulting 
in a different valuation for the E/M services contained in global 
packages than for separately billable E/M services. There is a critical 
need to obtain complete information if we are to value global packages 
accurately and in a way that preserves relativity across the fee 
schedule.
    In response to the requirement of section 1848(c)(8)(B)(i) of the 
Act that we develop, through rulemaking, a process to gather 
information needed to value surgical services, we proposed a rigorous 
data collection effort to provide us the data needed to accurately 
value the 4,200 codes with a 10- or 90-day global period. Using our 
authority under sections 1848(c)(2)(M) and (c)(8)(B)(i) of the Act, we 
proposed to gather the data needed to determine how to best structure 
global packages with post-operative care that is typically delivered 
days, weeks or months after the procedure and whether there are some 
procedures for which accurate valuation for packaged post-operative 
care is not possible. Finally, we indicated that these data would 
provide useful information to assess the resources used in furnishing 
pre- and post-operative care in global periods. To accurately do so, we 
need to know the volume and costs of the resources typically used.
    We proposed a three-pronged approach to collect timely and accurate 
data on the frequency of and the level of pre- and post-operative 
visits and the resources involved in furnishing the pre-operative 
visits, post-operative visits, and other services for which payment is 
included in the global surgical payment. By analyzing these data, we 
would not only have the most comprehensive information available on the 
resources used in furnishing these services, but also would be able to 
determine the appropriate packages for such services. Specifically, the 
proposal included:
     A requirement for claims-based reporting about the number 
and level of pre- and post-operative visits furnished for 10- and 90-
day global services.
     A survey of a representative sample of practitioners about 
the activities involved in and the resources used in providing a number 
of pre- and post-operative visits during a specified, recent period of 
time, such as two weeks.
     A more in-depth study, including direct observation of the 
pre- and post-operative care delivered in a small number of sites, and 
a separate survey module for practitioners practicing in ACOs.
    The information collected and analyzed through the activities would 
be the first comprehensive look at the volume and level of services in 
a global period, and the activities and inputs involved in furnishing 
global services. The data from these activities would ultimately inform 
our revaluation of global surgical packages as required by statute.
    To expand awareness of the proposal for data collection, we held a 
national listening session in which CMS reviewed the proposal for 
participants. Subsequent to this national listening session, we held a 
town hall meeting at the CMS headquarters in which participants, in 
person and virtual, shared their views on the proposal with CMS. The 
transcript from these town halls is available on the CMS Web site with 
the CY 2017 final rule downloads.
(1) Statutory Authority for Data Collection
    As described in this section of the final rule, section 
1848(c)(8)(B)(i) of the Act requires us to develop, through rulemaking, 
a process to gather information needed to value surgical services from 
a representative sample of physicians. The statute requires that the 
collected information include the number and level of medical visits 
furnished during the global period and other items and services related 
to the surgery and furnished during the global period, as appropriate.
    In addition, section 1848(c)(2)(M) of the Act, which was added to 
the Act by section 220 of the PAMA, authorizes the Secretary to collect 
or obtain information on resources directly or indirectly related to 
furnishing services for which payment is made under the PFS. Such 
information may be collected or obtained from any eligible professional 
or any other source. Information may be collected or obtained from 
surveys of physicians, other suppliers, providers of services, 
manufacturers, and vendors. That section also authorizes the Secretary 
to collect information through any other mechanism determined 
appropriate. When using information gathered under this authority, the 
statute requires the Secretary to disclose the information source and 
discuss the use of such information in the determination of relative 
values through notice and comment rulemaking.
    As described in this section of the final rule, to gain information 
to assist CMS in determining the appropriate packages for global 
services and to revalue those services, CMS needs more information on 
the resources used in furnishing such services. Through the claims-
based data collection and the study we are finalizing in this final 
rule, we would have better information about the actual number of 
services furnished to Medicare beneficiaries to use in valuation for 
these codes than has been typically available, such as from RUC surveys 
that reflect practitioner's estimates of the number of services 
typically furnished. We anticipate that such efforts would inform how 
to more regularly collect data on the resources used in furnishing 
physicians' services. To the extent that such mechanisms prove 
valuable, they may be used to collect data for valuing other services. 
To achieve this significant data collection, we proposed to collect 
data under the authority of both section 1848(c)(8)(B) and (c)(2)(M) of 
the Act.

[[Page 80212]]

(2) Claims-Based Data Collection
    We proposed a claims-based data collection that would have required 
all those providing 10- or 90-day global services to report on services 
furnished during the global period using a series of G-codes specially 
created for this purpose, beginning January 1, 2017.
    In response to the comments submitted on the proposal, we are 
finalizing a claims-based data collection that differs from this 
proposal in the following significant ways:
     CPT code 99024 will be used for reporting post-operative 
services rather than the proposed set of G-codes. Reporting will not be 
required for pre-operative visits included in the global package or for 
services not related to patient visit.
     Reporting will be required only for services related to 
codes reported annually by more than 100 practitioners and that are 
reported more than 10,000 times or have allowed charges in excess of 
$10 million annually.
     Practitioners are encouraged to begin reporting post-
operative visits for procedures furnished on or after January 1, 2017, 
but the mandatory requirement to report will be effective for services 
related to global procedures furnished on or after July 1, 2017.
     Only practitioners who practice in groups with 10 or more 
practitioners in Florida, Kentucky, Louisiana, Nevada, New Jersey, 
North Dakota, Ohio, Oregon, and Rhode Island will be required to 
report. Practitioners who only practice in smaller practices or in 
other geographic areas are encouraged to report data, if feasible.
    Given that the data collection will be limited to only some states, 
a subset of global services, and only to those who practice in larger 
practices the information collected through claims for global packages 
services will not parallel the claims data that are available in 
pricing other PFS services. However, we believe that the information 
collected through this data collection will be a significant 
improvement over the information currently available to value these 
services and will be supplemented with information obtained through 
other mechanisms.
    In the following sections, we discuss the comments on each element 
of our data collection proposal, our responses and our final decision.
(a) Information To Be Reported
    A key element of claims-based reporting is using codes that 
appropriately reflect the services furnished. In response to the 
comment solicitation in the CY 2016 PFS proposed rule and the input 
received via the January 2016 listening session, we received numerous 
recommendations for the information to be reported on claims. The most 
frequently recommended approach was for practitioners to report the 
existing CPT code for follow-up visits included in the surgical package 
(CPT 99024--Postoperative follow-up visit, normally included in the 
surgical package, to indicate that an E/M service was performed during 
a postoperative period for a reason(s) related to the original 
procedure). Others suggested using this code for outpatient visits and 
using length of stay data to estimate the number of inpatient visits 
during the global period. In response to our concerns that CPT code 
99024 would provide only the number of visits and not the level of 
visits as required by the statute, one commenter suggested using 
modifiers in conjunction with CPT code 99024 to indicate the level of 
the visit furnished. Others recommended using existing CPT codes for E/
M visits to report post-operative care. One commenter suggested that 
CMS analyze data from a sample of large systems and practices that are 
using electronic health records that require entry of some CPT code for 
every visit to capture the number of post-operative visits. After 
noting that the documentation requirements and PEs required for post-
operative visits differ from those of E/M visits outside the global 
period, one commenter encouraged us to develop a separate series of 
codes to capture the work of the post-operative services and to 
measure, not just estimate, the number and complexity of visits during 
the global period.
    Other commenters opposed the use of a new set of codes or the use 
of modifiers to report post-operative visits. Commenters also noted 
several issues for us to consider in developing data collection 
mechanisms, including that many post-operative services do not have CPT 
codes to bill separately, that surgeons perform a wide range of 
collaborative care services, and that patient factors, including 
disease severity and comorbidities, influence what post-operative care 
is furnished.
    To assist us in determining appropriate coding for claims-based 
reporting, we added a task to the RAND validation contract for 
developing a model to validate the RVUs in the PFS, which was awarded 
in response to a requirement in the Affordable Care Act. Comments that 
we received on the validation report suggested the models did not 
adequately address global surgery services due to the lack of available 
data on visits included in the global package. Therefore, we modified 
the validation contract to include the development of G-codes that 
could be used to collect data about post-surgical follow-up visits on 
Medicare claims for valuing global services under MACRA so that this 
time could be included in the model for validating RVUs.
    To inform its work on developing coding for claims-based reporting, 
the contractor conducted interviews with surgeons and other physicians/
non-physician practitioners (NPP) who provide post-operative care. A 
technical expert panel (TEP), convened by the contractor, reviewed the 
findings of the interviews and provided input on how to best capture 
care provided in the post-operative period on claims.
    In summarizing the input from the interviews and the TEP, the 
contractor indicated that several considerations were important in 
developing a claims-based method for capturing post-operative services. 
First, a simple system to facilitate reporting was needed. Since it was 
reported that a majority of post-operative visits are straightforward, 
the contractor found that a key for any proposed system is identifying 
the smaller number of complex post-operative visits. Another 
consideration was not using the existing CPT E/M structure to capture 
postoperative care because of concerns that E/M codes are inadequately 
designed to capture the full scope of post-operative care and that 
using such codes might create confusion. Another consideration was that 
the TEP was most enthusiastic about a set of codes that used site of 
care, time, and complexity to report visits. The contractor also 
believed it was important to distinguish--particularly in the inpatient 
setting--between circumstances where a surgeon is providing primary 
versus secondary management of a patient. Finally, a mechanism for 
reporting the postoperative care occurs outside of in-person visits and 
by clinical staff was needed. The report noted that in the inpatient 
setting in particular, surgeons spend considerable time reviewing test 
results and coordinating care with other practitioners.
    After reviewing various approaches, a set of time-based, post-
operative visit codes that could be used for reporting care provided 
during the post-operative period was recommended.
    The recommended codes distinguish services by the setting of care 
and whether they are furnished by a physician/NPP or by clinical staff. 
All codes are intended to be reported in 10-minute increments. A copy 
of the report

[[Page 80213]]

is available on the CMS Web site under downloads for the CY 2017 PFS 
proposed rule with comment period at http://www.cms.gov/physicianfeesched/downloads/.
    We proposed the following no-pay codes be used for reporting on 
claims the services actually furnished but not paid separately because 
they are part of global packages.

                 Table 9--Proposed Global Service Codes
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Inpatient......................  GXXX1          Inpatient visit,
                                                 typical, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX2          Inpatient visit,
                                                 complex, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX3          Inpatient visit,
                                                 critical illness, per
                                                 10 minutes, included in
                                                 surgical package.
Office or Other Outpatient.....  GXXX4          Office or other
                                                 outpatient visit,
                                                 clinical staff, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX5          Office or other
                                                 outpatient visit,
                                                 typical, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX6          Office or other
                                                 outpatient visit,
                                                 complex, per 10
                                                 minutes, included in
                                                 surgical package.
Via Phone or Internet..........  GXXX7          Patient interactions via
                                                 electronic means by
                                                 physician/NPP, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX8          Patient interactions via
                                                 electronic means by
                                                 clinical staff, per 10
                                                 minutes, included in
                                                 surgical package.
------------------------------------------------------------------------

(i) Coding for Inpatient Global Service Visits
    Our proposal included three codes for reporting inpatient pre- and 
post-operative visits that distinguish the intensity involved in 
furnishing the services. Under this proposal, visits that involve any 
combination or number of the services listed in Table 10, which were 
recommended by the contractor as those in a typical visit, would be 
reported using GXXX1. Based on the findings from the interviews and the 
TEP, the report indicated that the vast majority of inpatient post-
operative visits would be expected to be reported using GXXX1.

     Table 10--Activities Included in Typical Visit (GXXX1 & GXXX5)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Review vitals, laboratory or pathology results, imaging, progress notes.
Take interim patient history and evaluate post-operative progress.
Assess bowel function.
Conduct patient examination with a specific focus on incisions and
 wounds, post-surgical pain, complications, fluid and diet intake.
Manage medications (for example, wean pain medications).
Remove stitches, sutures, and staples.
Change dressings.
Counsel patient and family in person or via phone.
Write progress notes, post-operative orders, prescriptions, and
 discharge summary.
Contact/coordinate care with referring physician or other clinical
 staff.
Complete forms or other paperwork.
------------------------------------------------------------------------

    Under our proposal, inpatient pre- and post-operative visits that 
are more complex than typical visits but do not qualify as critical 
illness visits would be coded using GXXX2 (Inpatient visit, complex, 
per 10 minutes, included in surgical package). To report this code, the 
practitioner would be required to furnish services beyond those 
included in a typical visit and have documentation that indicates what 
services were provided that exceeded those included in a typical visit. 
In the proposed rule, we noted some circumstances that might merit the 
use of the complex visit code are secondary management of a critically 
ill patient where another provider such as an intensivist is providing 
the primary management, primary management of a particularly complex 
patient such as a patient with numerous comorbidities or high 
likelihood of significant decline or death, management of a significant 
complication, or complex procedures outside of the operating room (For 
example, significant debridement at the bedside).
    The highest level of inpatient pre- and post-operative visits, 
critical illness visits (GXXX3--Inpatient visit, critical illness, per 
10 minutes, included in surgical package) would be reported when the 
physician is providing primary management of the patient at a level of 
care that would be reported using critical care codes if it occurred 
outside of the global period. This involves acute impairment of one or 
more vital organ systems such that there is a high probability of 
imminent or life threatening deterioration in the patient's condition.
    Similar to how time is now counted for the existing CPT critical 
care codes, we proposed that all time spent engaged in work directly 
related to the individual patient's care would count toward the time 
reported with the inpatient visit codes; this includes time spent at 
the immediate bedside or elsewhere on the floor or unit, such as time 
spent with the patient and family members, reviewing test results or 
imaging studies, discussing care with other staff, and documenting 
care.
(ii) Coding for Office and Other Outpatient Global Services Visits
    For the three codes in our proposal that would be used for 
reporting post-operative visits in the office or other outpatient 
settings, codes, time would be defined as the face-to-face time with 
patient, which reflects the current rules for time-based outpatient 
codes.
    Like GXXX1, GXXX5 (Office or other outpatient visit, typical, per 
10 minutes, included in surgical package) would be used for reporting 
any combination of activities in Table 10 under our proposal.
    We proposed only face-to-face time spent by the practitioner with 
the patient and their family members would count toward the time 
reported with the office visit codes.
(iii) Coding for Services Furnished via Electronic Means
    Services that are furnished via phone, the internet, or other 
electronic means outside the context of a face-to-face visit would be 
reported using GXXX7 when furnished by a practitioner and GXXX8 when 
provided by clinical staff under our proposal. We proposed that 
practitioners would not report these services if they are furnished the 
day before, the day of, or the day after a visit as we believe these 
would be included in the pre- and post-service activities in the 
typical visit. However, we proposed that these codes be used to report 
non-face-to-face services provided by clinical staff prior to the 
primary procedure since global surgery codes are typically valued with 
assumptions regarding pre-service clinical labor time. Given that some 
practitioners have indicated that services they furnish commonly 
include activities outside the face-to-face service, we believed it was 
important to capture information about those activities in both the 
pre- and post-service periods. We also believed these requirements to 
report on clinical

[[Page 80214]]

labor time are consistent with and no more burdensome than those used 
to report clinical labor time associated with chronic care management 
services, which similarly describe care that takes place over more than 
one patient encounter.
    In addition, we proposed for services furnished via interactive 
telecommunications that meet the requirements of a Medicare telehealth 
service visit, the appropriate global service G-code for the services 
would be reported with the GT modifier to indicate that the service was 
furnished ``via interactive audio and video telecommunications 
systems.''
(iv) Rationale for Use of G-Codes
    After considering the contractor report, the comments in response 
to the comment solicitation in the CY 2016 proposed rule and other 
stakeholder input that we have received, and our needs for data to 
fulfill our statutory mandate and to value surgical services 
appropriately, we proposed this new set of codes because we believe it 
provides us the most robust data upon which to determine the most 
appropriate way and amounts to pay for PFS surgical services. We noted 
that these proposed codes would provide data of the kind that can 
reasonably collected through claims data and that reflect what we 
believe are key issues in the valuation of post-operative care--where 
the service is provided, who furnishes the service, its relative 
complexity, and the time involved in the service.
    We solicited public comments about all aspects of these codes, 
including the nature of the services described, the time increment, and 
any other areas of interest to stakeholders. We noted particular 
interest in any pre- or post-operative services furnished that could 
not be appropriately captured by these codes. We solicited comments on 
whether the proposed codes were appropriate for collecting data on pre-
operative services. We also sought comment on any activities that 
should be added to the list of activities in Table 10 to reflect 
typical pre-operative visit activities.
(v) Alternative Approach to Coding
    In making the proposal for G-codes, we noted that many stakeholders 
had expressed strong support for the use of CPT code 99024 
(Postoperative follow-up visit, normally included in the surgical 
package, to indicate that an evaluation and management service was 
performed during a post-operative period for a reason(s) related to the 
original procedure) to collect data on post-operative care. In response 
to stakeholders noting that practitioners are familiar with this 
existing CPT code and the burden on practitioners would be minimized by 
only having to report that a visit occurred, not the level of the 
visit, we noted that we did not believe that this code alone would 
provide the information that we need for valuing surgical services nor 
do we believe it alone can meet the statutory requirement that we 
collect data on the number and level of visits. Given the strong 
support for the use of CPT code 99024, we solicited comments 
specifically on how we could use this code to capture the statutorily 
required data on the number and level of visits and the data that we 
would need to value global services in the future.
    We also discussed in the proposed rule our concern that using CPT 
code 99024 with modifiers to indicate to which of the existing levels 
of E/M codes the visit corresponds may not accurately capture what 
drives greater complexity in post-operative visits. We noted that as 
outlined in the contractor's report, E/M billing requirements are built 
upon complexity in elements such as medical history, review of systems, 
family history, social history, and how many organ systems are 
examined. In the context of a post-operative visit, many of these 
elements may be irrelevant. The contractor's report also notes that 
there was significant concern from interviewees and the expert panel 
about documentation that is required for reporting E/M codes. 
Specifically, they stated that documentation requirements for surgeons 
to support the relevant E/M visit code would place undue administrative 
burden on surgeons given that many surgeons currently use minimal 
documentation when they provide a postoperative visit. We also noted 
that to value surgical packages accurately we need to understand the 
activities involved in furnishing post-operative care and as discussed 
above, we lack information that would demonstrate that activities 
involved in post-operative care are similar to those in E/M services. 
In addition, the use of modifiers to report levels of services is more 
difficult to operationalize than using unique HCPCS codes. However, we 
sought comments on whether, and if so, why, practitioners would find it 
easier to report CPT code 99024 with modifiers corresponding to the 
proposed G-code levels rather than the new G-codes, as proposed. We 
also sought comment on whether practitioners would find it difficult to 
use this for pre-operative visits since the CPT code descriptor 
specifically defines it as a ``post-operative follow-up'' service.
    We also sought comment on whether time of visits could alone be a 
proxy for the level of visit. If pre- and post-operative care varies 
only by the time the practitioner spends on care so that time could be 
a proxy for complexity of the service, then we could use the reporting 
of CPT code 99024 in 10-minute increments to meet the statutory 
requirement of collecting claims-based data on the number and level of 
visits. In addition to comments on whether time is an accurate proxy 
for level of visit, we solicited comment on the feasibility and 
desirability of reporting CPT code 99024 in 10-minute increments.
    The following is a summary of the comments that we received on our 
proposal to use G-codes for reporting the services furnished during the 
pre- and post-operative periods of 10- and 90-day global services.
    Comment: Many commenters offered critiques of the G-codes. Most 
objected to reporting using the proposed G-codes. Some commenters 
raised concerns with the code definitions. These included: Lack of 
alignment with clinical workflow, failure to adequately account for 
variation in complexity and medical decision-making, and use of the 
term ``typical'' to define visits in a different way than the term is 
generally used in PFS valuations. One commenter suggested that CMS 
should require care plans for outpatient visits in the post-operative 
period. It was also suggested that the complex visit code could be 
improved by using a term other than ``complex'' in the definition. A 
commenter questioned whether that vast majority of cases would be 
complex instead of ``typical,'' since the definition of ``complex'' 
included management of a patient with multiple comorbidities and most 
Medicare beneficiaries have multiple comorbidities. A commenter also 
suggested that CMS refine the G-codes to distinguish physician visits 
from NPP visits. In addition, several commenters objected to the 
proposed G-codes for on-line and telephone services because they 
believed it would be nearly impossible to track these data and 
extremely burdensome to do so. Commenters indicated that the G-codes 
were not well-defined overall and should not be used without testing to 
determine their validity.
    Response: We appreciate the detailed comments on the design of the 
G-codes and the concerns regarding their limitations in appropriately 
reflecting the services furnished in 10- and 90-day global periods. 
These comments provide information for how the G-codes could

[[Page 80215]]

be modified to better reflect services furnished in global periods, 
however, as is discussed at the outset of this section, we are not 
using the proposed G-codes for this data collection effort.
    Comment: Most commenters objected to using codes based on time 
increments and the proposed 10-minute increments, specifically. Some 
stated that reporting of services by time did not reflect the way 
surgeons practiced and would divert practitioners from patient care. 
One commenter stated that it was not feasible for practitioners to 
collect time data for every task that they or their clinical staff 
performed. Another stated that requesting physicians and/or their staff 
to use a stop-watch to, in effect, conduct time and motion studies for 
all their non-operating room patient care activities is an incredible 
burden. Another stated that reporting time in 10-minute increments ``is 
untenable,'' noting that, except for a few specialties, physicians do 
not think of providing care in terms of timed increments. The commenter 
added that surgeons, in particular, are not accustomed to reporting 
time for all pre- and post-operative visits and to do so would be a 
huge disruption to workflow. In addition to objections about the burden 
of reporting time data, some commenters objected to the use of time 
data as a factor in valuations.
    Three organizations commented that it was appropriate to collect 
time data, but recommended that we do so based upon 15-minute 
increments as these were more familiar to physicians than the proposed 
10-minue increments. In addition, some other groups, including MedPAC, 
agreed that data on time was needed for valuations.
    Response: Time is a key factor in valuing physician services under 
the physician fee schedule. Section 1848(c)(1) of the Act defines the 
work component as the portion of the resources used in furnishing the 
service that reflects physician time and intensity in furnishing the 
service. We also note that time-based codes are used by practitioners 
for a range of services in the PFS including psychotherapy, 
anesthesiology and critical care services. Critical care services are 
notable because these services are likely to be furnished 
intermittently as many commenters suggested is typical for post-
operative follow-up services. Since issues have not been raised about 
the difficulty of using the current critical care codes, it is unclear 
why reporting of time would be burdensome and disruptive of care in 
this area. We have no reason to believe the documentation of time is 
more difficult or burdensome for those furnishing 10- and 90-day global 
services than for other practitioners. However, based on the comments, 
it is clear that many practitioners would perceive reporting of time 
involved in furnishing these services to be a significant increase in 
burden relative to existing practice. Before implementing a change 
considered by so many to be so burdensome, we are exploring other ways 
of obtaining information that can be used to improve the accuracy of 
valuing these services. Accordingly, we are not finalizing, at this 
time, the requirement to use time-based codes.
    Comment: Many commenters stated that the use of these codes would 
be costly, requiring extensive education of practitioners and staff and 
necessitating updates to EHR systems and billing software. Some also 
noted the cost of processing additional claims. Many commenters noted 
that this would be particularly difficult as this additional 
administrative burden would come at the same time practitioners are 
adjusting the Merit-based Incentive Payment System (MIPS). One 
commenter provided the results of a survey of surgical practitioners in 
20 specialties in which 30 percent of respondents stated that the cost 
of integrating the new G-codes into their practice would cost more than 
$100,000 and only about 10 percent stated that it would cost less than 
$25,000.
    Some commenters expressed specific concern about the documentation 
burden that would come from using these codes. On the other hand, other 
commenters suggested that providers of visits during the global 
surgical services should be held to the same documentation standards as 
providers of E/M services. One stated that the ``administrative burden 
on surgeons should be no different and certainly no less than that on 
non-surgeons when it comes to documenting a visit with a patient. If 
many surgeons currently use minimal documentation when they provide a 
post-operative visit that is no excuse for expecting the same 
inadequate level of documentation going forward. To require anything 
less than the same level of documentation for all clinicians providing 
E/M services would be irresponsible and unfair and would defeat the 
very purpose of documenting the actual types and extent of these 
services in the post-operative period.''
    Response: The need for accurate, complete and useful data must be 
balanced with administrative burden and cost. We articulated that using 
a select number of G-codes based on time would impose a burden on 
providers, but that burden is necessary for us to comply with the 
statutory requirement to gather the data necessary to value global 
procedures. We note that CPT routinely incorporates more than 100 new 
codes in annual updates, and for this reason we did not anticipate that 
the inclusion of eight new G-codes was likely to present significant 
challenges to EHR systems or other infrastructure. Based on the 
comments we received, however, it is clear that the majority of 
stakeholders believe the burden is much greater than we had assumed. In 
general, we agree with commenters that comparable documentation is 
appropriate for all physicians furnishing and being paid by Medicare 
for similar services.
    Comment: Several commenters noted that the difficulties of using 
these codes would affect the accuracy of the data reported. One 
commenter stated that the G-code proposal would be impossible to 
implement and ``at the very least'' would yield incomplete and 
unreliable results.
    Response: We agree with commenters that implementation burden is an 
important consideration in determining how practitioners should report 
on care provided in the post-operative period and that if practitioners 
find the reporting requirements to be excessive and require great 
expenditures to incorporate into their practice, the accuracy of the 
data could be undermined. We considered this in determining the final 
policy described below.
    Comment: Some commenters criticized the proposed G-codes because 
they were not directly linked to E/M codes or comparable to existing E/
M codes. On the other hand, some commenters preferred the codes 
describing such visits not be linked or comparable to E/M codes to 
avoid confusion or unintentional, inappropriate payments. One commenter 
stated that the follow-up work performed within the global periods and 
the continuity work performed by cognitive physicians should not be 
represented by the same codes. Another commenter stated that the care 
required by a patient recovering from a procedure is fundamentally 
different from the typical follow-up of an established outpatient or 
inpatient, especially when there are multiple simultaneous interacting 
conditions, a single metastable chronic illness, or one or more acute 
exacerbated chronic illnesses that requires inpatient care and 
expertise.
    Response: Commenters' belief that the work in follow-up visits 
included in the global package is not necessarily well described by the 
work of current E/M

[[Page 80216]]

codes is worth exploring. Current data does not allow us to determine 
the validity of these commenters' assertion but given its importance, 
we believe it is critical to gather data on whether follow-up visits 
provided in the post-operative period are different than other E/M 
services. To the extent the services in the post-operative period are 
different from other E/M services, it would not make sense to use E/M 
codes in valuing global services as is ostensibly the case under the 
current process the RUC uses in developing recommended values for PFS 
services.
    Comment: Most commenters supported using CPT codes, rather than the 
proposed G-codes. A few pointed to the existing E/M codes, but most 
recommended that any claims-based reporting use CPT code 99024, an 
existing CPT code that describes post-operative services in a global 
period. Commenters noted that since this is a current CPT code the 
administrative burden would be much less than that associated with 
using the proposed new G-codes. These commenters suggest that 
practitioners are likely already familiar with the code, some already 
use it to track services within their practice, and some others already 
report it to other payers. Also, they suggest that because EHR and 
billing systems already include CPT code 99024, it will be less costly 
to implement than the proposal. Some also preferred using CPT code 
99024 because unlike the proposed G-codes it does not require the 
reporting of time units.
    Most commenters disagreed that time could be a proxy for the 
complexity of the visit and objected to reporting time for the same 
reasons discussed above. These commenters did not agree that CPT code 
99024 could be reported in time units as a proxy for collecting the 
required information about the level of visits.
    Three organizations disagreed, however, stating that time is a 
sufficient proxy for work relativity in post-operative visits and that 
the number units of CPT code 99024 could reflect the complexity 
involved. These commenters recommended reporting data in 15-minute 
intervals, rather than the proposed 10-minute increments, stating that 
physicians are familiar with 15-minute increments and thus the use of 
15-minute increments would greatly reduce the administrative burden. 
They recommended that CMS clearly define how time is to be reported and 
suggested that the 8-minute rule is already a familiar concept that 
could be used.
    Many commenters suggested that other approaches, such as a survey, 
clinical registries, or on-line portals be used to collect data on 
level of visits.
    Several commenters stated that CMS should not collect data on the 
level of visits based on these commenters' perspective that there is no 
problem with the level of visits currently used in the valuation of 
global packages. One commenter pointed out that only 1 percent of all 
established patient office visits used in valuing 10-day and 90-day 
global surgery packages have a visit level above a CPT code 99213. 
Another commenter suggested that the survey be used to collect data on 
the level of visits. Others suggested that RUC surveys be used to 
measure level of visits.
    Response: We understand that stakeholders believe that using CPT 
code 99024 rather than the proposed G-codes will significantly lower 
administrative burden and lower costs related to the collection of this 
data. We do not have data showing that the level of visits used in 
valuation of global packages are correct or incorrect; to the best of 
our knowledge, this has never been assessed outside of the RUC process. 
While the current valuations for global packages rely primarily on CPT 
codes 99212 and 99213 for the visit component, we do not agree that 
this means that the levels are accurate. Further, as some commenters 
have made clear, there is not consensus among stakeholders that the 
post-operative visits are equivalent to other E/M visits. Additionally, 
the relationship between the number and level of visits assumed to be 
in the global period and the overall work RVUs for the global codes is 
often unclear. For all of these reasons, we disagree with commenters 
that we do not need to collect data on the level of services.
    In addition to the statutory reference to collecting data on the 
level of visits, we believe that code valuations can be more accurate 
with more complete information. While we continue to believe that data 
only on the number of visits furnished would not provide data on both 
the number and level of visits needed for valuation of services, data 
on the number of visits alone is an important input in valuing global 
packages and having accurate data on the number of visits could be a 
useful first step in analyzing the global packages.
    After considering the comments, we are finalizing a requirement to 
report post-operative visits furnished during 10- and 90-day global 
periods. However, rather than using the proposed set of G-codes for 
this reporting, we are requiring that CPT code 99024 be used to report 
such visits. We will not, at this time, require time units or modifiers 
to distinguish levels of visits to be reported. Since this code is 
specifically limited to post-operative care, we are only requiring 
reporting of post-operative visits. We expect that the reporting of 
this information through Medicare claims will provide us with 
information about the actual number of visits furnished during the 
post-operative periods for many services reported using global codes. 
Because the number of visits is a major factor in valuation of global 
services, we believe that examination of such information, when 
available, can improve the accuracy of the global codes. The use of a 
simple code that practitioners are familiar with should facilitate the 
submission of accurate information. We expect practitioners to note the 
visit in the medical chart documenting the post-operative visit.
    Since CPT code 99024 will only provide data on the number of visits 
and no data on the level or resources used in furnishing the visit, we 
believe this is only the first step in gathering the data required by 
Section 1848(c)(8). The proposed G-codes could have provided 
information to better understand the resources used in furnishing 
services during global periods and in valuation of such services 
assuming that they could be accurately reported. However, widespread 
concerns from groups representing the practitioners that would be 
reporting these services, including concerns about the burdens 
regarding and the inability of physicians to track time and the need to 
learn a new 8-code coding system, persuade us that we should pursue 
less burdensome ways of obtaining information. We will assess whether 
these methods will lead to the collection of necessary data, including 
data on time and intensity, of these services.
    As suggested by commenters, we will explore whether the data 
collected from the survey that we are conducting, which is discussed 
later in this preamble, can provide information on the level of visits 
and other resources needed to value surgical services accurately. 
Stakeholders should be aware that since this a new approach for 
collecting data, and one that has not been used previously, we are 
concerned that additional or different reporting will be necessary to 
collect data on the number and level of visits and other information 
needed to value surgical services as required by Section 1848(c)(8).

[[Page 80217]]

b. Reporting of Claims
    We proposed that the G-codes detailed above would be reported for 
services related to and within 10- and 90-day global periods for 
procedures furnished on or after January 1, 2017. Services related to 
the procedure furnished following recovery and otherwise within the 
relevant global period would be required to be reported. These codes 
would be included on claims filed through the usual process. Through 
this mechanism, we would collect all of the information reported on a 
claim for services, including information about the practitioner, 
service furnished, date of service, and the units of service. By not 
imposing special reporting requirements on these codes, we proposed to 
allow practitioners the flexibility to report the services on a rolling 
basis as they are furnished or to report all of the services on one 
claim once all have been furnished, as long as the filed claims meet 
the requirements for filing claims.
    We did not propose any special requirements for inclusion of 
additional data on claims that could be used for linking the post-
operative care furnished to a particular service. To use the data 
reported on post-operative visits for analysis and valuation, we 
proposed to link the data reported on post-operative care to the 
related procedure using date of service, practitioner, beneficiary, and 
diagnosis. While we believed this approach to matching would allow us 
to accurately link the preponderance of G-codes to the related 
procedure, we sought comment on the extent to which post-operative care 
may not be appropriately linked to related procedures whether we should 
consider using additional variables to link these aspects of the care, 
and whether additional data should be required to be reported to enable 
a higher percentage of matching.
    The following is summary of the comments we received on our 
proposal to require reporting on pre- and post-operative care 
associated with all procedures with 10- and 90-day global periods.
    Comment: Many commenters objected to the proposal to require 
reporting on post-operative services for all 10- or 90-day global 
services. Some suggested that many of the global services are low 
volume and have little impact on Medicare spending. It was also noted 
that it would be difficult to obtain a meaningful sample of low-volume 
services. Others discussed the burden of reporting on all services. The 
RUC recommended that CMS only require reporting on services that are 
furnished by more than 100 providers and that either are furnished more 
than 10,000 times or have allowed charges of more than $10 million 
annually to obtain meaningful data for valuation. The RUC noted that 
many procedures were infrequently furnished and thus useful data would 
not be obtained. This position was supported by a significant number of 
commenters. In response to the stated concern about having complete 
data when more than one surgical service is furnished during the global 
period, a commenter pointed out that a review of the 2014 Medicare 5 
percent sample file shows that, two surgical global codes are performed 
on the same date of service, by the same physician, only 18 percent of 
the time.
    Response: The commenters are correct that the vast majority of 10- 
and 90-day procedures are furnished infrequently and thus have little 
effect on Medicare expenditures or direct impact on the valuations of 
other services under the PFS. We proposed to collect data on all 
procedures since we believed the data we collected would be more 
accurate if physicians reported on all services as it would be routine 
and would not have required physicians to determine at each pre- and 
post-operative visit whether or not reporting the service was required. 
Moreover, as pointed out by commenters, we believe that reporting on 
all applicable services would have provided more complete data when 
multiple surgeries occurred during the global period.
    Having specific data on all procedures would provide specific 
information for each service that Medicare pays for using a global 
period. In assessing the likely benefit of the additional data as 
compared to the burden of reporting based on the comments we received, 
we agree with commenters that collecting the data from high volume/high 
cost procedures could provide adequate information to improve the 
accuracy of valuation of global packages overall. Even if all 
practitioners reported data on all procedures, it is likely that we 
would not receive enough data on low-volume services for the data to be 
reliable for use in valuations. There are more than 1,500 services that 
are furnished less than 100 times per year. Because of this, data that 
we could collect on these services would be extremely limited. We also 
find that data on services with low volumes are not reliable due to 
variability from year to year. Since we often value related services by 
extrapolating data on one service to other services in the family, with 
adjustments as necessary to reflect variations in the procedure, the 
data gathered on high-volume services could similarly be used to value 
low-volume services in the same family. As a result we, believe that 
the data on high-volume services can improve the accuracy of values for 
all 10- and 90-day services.
    After consideration of the comments, we are implementing a 
requirement for reporting on services that are furnished by more than 
100 practitioners and are either furnished more than 10,000 times or 
have allowed charges of more than $10 million annually as recommended 
by the RUC and many other commenters. Under this policy, we estimate 
that we would collect data on about 260 codes that describe 
approximately 87 percent of all furnished 10- and 90-day global 
services and about 77 percent of all Medicare expenditures for 10- and 
90-day global services under the PFS. Given that this data would 
provide information on the codes describing the vast majority of 10- 
and 90-day global services and expenditures, it will provide 
significant data for valuation. For 2017, we will use the CY 2014 
claims data to determine the codes for which reporting is required and 
display the list on the CMS Web site. In subsequent years, we will 
update the list to reflect more recent claims data and publish a list 
of codes prior to the beginning of the reporting year. The services for 
which reporting is required will include successor codes to those 
deleted or modified since CY 2014 for which reporting would have been 
required if the code had not been deleted or modified.
    The following is summary of the comments we received on our 
proposal to require claims-based reporting for services related to 
procedures furnished on or after January 1, 2017.
    Comments: Many commenters expressed concerns regarding the 
difficulty of making the changes required to implement this new 
reporting by January 1, 2017. Some commenters noted that this change 
was coming at the same time as the new MIPS program. Some commenters 
stated that the statute required a process to be in place by January 1, 
2017, but that CMS has flexibility regarding when to begin the required 
reporting. Some commenters suggested that CMS consider conducting the 
proposed survey before implementing any claims-based reporting.
    Response: We proposed to begin required reporting on January 1, 
2017, based upon the statutory language regarding both the collection 
and use of the data for revaluation of services. We understand that 
some practices will need to make modifications to their EHR and billing 
systems to report this data to

[[Page 80218]]

us. We also acknowledge that an opportunity for testing the systems and 
training will enhance the quality of data that we receive.
    After consideration of comments, we are encouraging practitioners 
to begin reporting data on post-operative services for procedures 
furnished on or after January 1, 2017. However, the requirement to 
report will become mandatory for post-operative services related to 
procedures furnished on or after July 1, 2017 rather than as of January 
1, 2017, as proposed. This delay will not negatively impact the use 
value of the collected data since we expect that data received early in 
the year might be less complete than data submitted once practitioners 
adjusted to the requirements. Also, by allowing time for practitioners 
to adjust EHR and billing software, to test such systems and to train 
staff, we think the quality of the data will be enhanced by providing 
flexibility with regard to the effective date of the requirement. 
Finally, because we are limiting required reporting to high-volume 
codes, meaningful data for CY 2017 should be available from 6 months of 
reporting. Our systems can now accept the post-operative visit data so 
practitioners can begin submitting such claims at any time.
c. Special Provisions for Teaching Physicians
    We sought comment on whether special provisions are needed to 
capture the pre- and post-operative services provided by residents in 
teaching settings. If the surgeon is present for the key portion of the 
visit, should the surgeon report the joint time spent by the resident 
and surgeon with the patient? If the surgeon is not present for the key 
portion of the visit, should the resident report the service? If we 
value services without accounting for services provided by residents 
that would otherwise be furnished by the surgeon in non-teaching 
settings, subsequent valuations based upon the data we collect may 
underestimate the resources used, particularly for the types of 
surgeries typically furnished in teaching facilities. However, there is 
also a risk of overvaluing services if the reporting includes services 
that are provided by residents when those services would otherwise be 
furnished by a physician other than the surgeon, such as a hospitalist 
or intensivist, and as such, should not be valued in the global 
package.
    Comment: We received only a few comments on this issue. Some 
commenters suggested using the CMS policies that apply to other 
services that teaching surgeons report to CMS for the reporting of CPT 
code 99024. More specifically, when the appropriate conditions are met 
they would use the GC or GE modifier to identify those services in 
which surgical residents are involved. One of these suggested that once 
we have the data we discuss with stakeholders how to use the data 
involving residents in future valuations. Others suggested that we 
capture data on resident's time as it could be important for valuation, 
especially for the more complex cases in a teaching facility setting. 
Some urged that we provide clear guidance on when the resident's time 
could be reported. One commenter stated that teaching physicians should 
be exempt from reporting requirements.
    Response: These comments reinforce the importance of collecting 
data from teaching physicians and to do so using the existing Medicare 
rules that teaching physicians use in reporting services in which 
residents are involved in furnishing. Because we are finalizing data 
collection using CPT code 99024, the issues regarding the reporting of 
time data are no longer relevant.
    After consideration of the comments, we are finalizing a 
requirement that teaching physicians will be subject to the reporting 
requirements in the same way that other physicians are. Such physicians 
should report CPT code 99024 only when the services furnished would 
meet the general requirements for reporting services and should use the 
GC or GE modifier as appropriate.
e. Who Reports
    In both the comments on the CY 2016 proposed rule and in input from 
the January 2016 national listening session, there was a great deal of 
discussion regarding the challenges that we are likely to encounter in 
obtaining adequate data to support appropriate valuation. Some 
indicated that a broad sample and significant cooperation from 
physicians would be necessary to understand what is happening as part 
of the global surgical package. One commenter suggested that 
determining a representative sample would be difficult and, due to the 
variability related to the patient characteristics, it would be easier 
to have all practitioners report. Many suggested that we conduct an 
extensive analysis across surgical specialties with a sample that is 
representative of the entire physician community and covers the broad 
spectrum of the various types of physician practice to avoid problems 
that biased or inadequate data collection would cause. Suggestions of 
factors to account for in selecting a sample include specialty, 
practice size (including solo practices), practice setting, volume of 
claims, urban, rural, type of surgery, and type of health care delivery 
systems. Another commenter pointed out that small sample sizes may lead 
to unreliable data. Some commenters stated that requiring all 
practitioners to report this information is unreasonable and would be 
an insurmountable burden. A participant acknowledged that it would be 
difficult for practitioners to report on only certain procedures, while 
another stated that this would not be an administrative burden.
    After considering the input of stakeholders on the CY 2016 proposed 
rule and at the January 2016 national listening session discussed 
above, we proposed that any practitioner who furnishes a procedure that 
is a 10- or 90-day global service report the pre- and post-operative 
services furnished on a claim using the proposed G-codes. We agreed 
with stakeholders that it would be necessary to obtain data from a 
broad, representative sample. However, as we struggled to develop a 
nationally representative sampling approach that would result in 
statistically reliable and valid data, it became apparent that we do 
not have adequate information about how post-operative care is 
delivered, how it varies and, more specifically, what drives variation 
in post-operative care to develop a sampling frame. In its work to 
develop the coding used for its study, the contractor found a range of 
opinions on what drives variation in post-operative care. (The report 
is available on the CMS Web site under downloads for the CY 2017 PFS 
proposed rule with comment period at http://www.cms.gov/physicianfeesched/downloads/.) Without information on what drives 
variation in pre- and post-operative care, we would have to speculate 
about the factors upon which to base a sample or assume that the 
variation in such care results from the same variables as are 
frequently identified for explaining variation in health care and 
clinical practice. In addition, we expressed concern about whether a 
sample could provide sufficient volume to value accurately the global 
package, except in the case of a few high-volume procedures.
    In addition to concerns about achieving a statistically 
representative sample of all practitioners nationally, we noted in the 
proposed rule significant operational concerns with limiting data 
collection to a subset of practitioners or a subset of services. These 
include how to gain sufficient information on practitioners to stratify 
the sample, how to identify the

[[Page 80219]]

practitioners who must report, and for those who practice in multiple 
settings or with multiple groups in which settings the practitioner 
would report. We concluded that establishing the rules to govern which 
post-operative care should be reported based on our proposed G-codes 
would be challenging for us to develop and difficult for physicians to 
apply in the limited time between the issuance of the CY 2017 PFS final 
rule with comment period and the beginning of reporting on January 1, 
2017. We do not believe that the same problems apply to the same extent 
to our final policy to use a single code that already exists to report 
services described only by codes reported in high volumes. For example, 
implementation of new sets of codes associated with annual PFS updates 
are often supported by informational and educational efforts undertaken 
by national organizations, like the national medical specialty 
societies. Given that many practitioners are already familiar with CPT 
code 99024 (as noted by many commenters), the need for such efforts is 
significantly mitigated.
    We also noted in the proposed rule that the more robust the 
reported data, the more accurate our ultimate valuations can be. We 
stated that given the importance of data on visits in accurate 
valuations for global packages, collecting data on all pre- and post-
operative visits in the global period is the best way to accurately 
value surgical procedures with global packages.
    We recognized that reporting would require submission of additional 
claims by those practitioners furnishing global services, but indicated 
that we believed the benefits of accurate data for valuation of 
services merited the imposition of this requirement. By using the 
claims system to report the data, we believed the additional burden 
would be minimized and referred to stakeholder reports that many 
practitioners are already required by their practice or health care 
system to report a code for each visit for internal control purposes 
and some of these systems already submit claims for these services, 
which are denied. We noted that requiring only some physicians to 
report this information, or requiring reporting for only some codes, 
could actually be more burdensome to physicians than requiring this 
information from all physicians on all services because of the 
additional steps necessary to determine whether a report is required 
for a particular service and adopting a mechanism to assure that data 
is collected and reported when required. Moreover, we stated that the 
challenges with implementing a limited approach at the practice level 
as compared to a requirement for all global services would result in 
less reliable data being reported.
    We noted that as we analyzed the data collected and made decisions 
about valuations, we would reassess the data needed and what should be 
required from whom. Through the data collected under our proposal, we 
indicated that we would have the information to assess whether the 
post-operative care furnished varies by factors such as specialty, 
geography, practice setting, and practice size, and thus, the 
information needed for a sample selection to be representative.
    While section 1848(c)(8)(B) of the Act requires us to collect data 
from a representative sample of physicians on the number and level of 
visits provided during the global period, we stated that it does not 
prohibit us from collecting data from a broad set of practitioners. In 
addition, section 1848(c)(2)(M) of the Act authorizes the collection of 
data from a wide range of physicians. Given the benefits of more robust 
data, including avoiding sample bias, obtaining more accurate data, and 
facilitating operational simplicity, we noted that we believed 
collecting data on all post-operative care initially is the best way to 
undertake an accurate valuation of surgical services in the future.
    The following is a summary of the comments that we received on our 
proposal to require all practitioners furnishing 10- or 90-day global 
services to submit claims for the pre- and post-operative services 
furnished.
    Comment: Commenters overwhelmingly opposed requiring all 
practitioners to submit claims for postoperative services. Several 
reasons were cited for the opposition. The most significant reason was 
the administrative burden and costs to physicians. Many commenters also 
stated that requiring all practitioners who furnish 10- or 90-day 
global services to report data is counter to the statute because the 
statute refers to collection of data from a representative sample of 
physicians.
    One commenter stated that requiring every practitioner to report 
these codes will be in many ways less representative than a targeted 
sample, explaining that given the limited time for education, only 
large, technologically rich practices will have the ability to properly 
report these services. The commenter noted that this will leave many, 
smaller or rural practices without the proper education and robust 
billing systems in place to adequately, if at all, report these G-
codes. The commenter also noted that smaller, rural practices have 
smaller patient populations, which can often be older and sicker than 
the typical patient seen in a large practice and by creating a complex 
system that favors one type of practice, the collected data is more 
likely to be biased rather than representative. Another commenter 
suggested that a small number of representative practices could provide 
us with the same level of accuracy as collected data from all 
physicians.
    Response: In response to commenters' opposition to our proposal to 
require all providers of covered services to report data, we 
acknowledge that the stakeholders describe a much larger burden from 
using the G-codes than we anticipated. On the other hand, we also 
believe that our final policy will result in a much lower burden than 
the proposed policy would have. As noted above, we are not finalizing 
the proposed requirements to use the G-codes or the proposed 
requirement to report on all 10- and 90-day global procedures and thus, 
we believe that the overall administrative burden is significantly 
reduced.
    We do not agree with commenters that state that we do not have the 
statutory authority to require reporting by all practitioners 
furnishing certain services. We point commenters to section 
1848(c)(2)(M) of the Act, which authorizes the collection of data to 
use in valuing PFS services. We continue to believe that section 
1848(c)(8) of the Act requires us to collect data that is 
representative. We also continue to believe that requiring all 
practitioners to report is more likely to be representative than a 
sample given our lack of information about what drives variation in 
post-operative care. However, after considering the information 
presented by commenters regarding the difficulties that would be placed 
on many physicians by the proposal, we believe that requiring reporting 
by all practitioners for CY 2017 may present unforeseen, alternative 
impediments to the sample being nationally representative of all 
practitioners, such as practitioners being unable to report data 
accurately due to constraints of time, finances or technical ability.
    Comment: We did not receive any comments on the appropriate sample 
size. Nor did we receive data on variations in the delivery of post-
operative care in response to our concern that we lacked data on how 
post-operative care was delivered to select a representative sample. 
Many commenters stated that it was possible to select a representative 
sample, but none provided details on how to do so.

[[Page 80220]]

    Several commenters suggested broadly sampling using the 
characteristics that are frequently used for health care sampling 
generally, such as geographic areas, urban and rural, practice types, 
practice sizes, specialties and academic and non-academic. One 
commenter recommended that we select a sample using geographical data 
to identify a sample including practices of all sizes. The commenter 
suggested, for example, that large hospital-based practices often have 
practice patterns that are different from the majority of the 
practicing physicians in suburban and rural areas. Another commenter 
stated that we should not only collect data from MSAs but also from 
rural and less urban areas.
    One commenter suggested that we consider phasing in the 
requirement, perhaps starting with larger groups. The commenter stated 
that through one of these approaches we could avoid ``burdening 
providers with unfunded work that has not yet been tested.''
    One commenter suggested that we use a geographic sampling approach 
similar to that one used for Comprehensive Care for Joint Replacement 
(CJR) model or the episode payment models proposed for cardiac and 
surgical hip/femur fraction and modify it to choose a geographic 
sampling unit of MSAs and non-MSAs.
    Response: We agree with commenters that we could select a sample 
using an approach typically used in health care surveys or in Medicare 
models and other programs. To the extent that the delivery of post-
operative care varies only based upon the criteria we selected, a 
sample based on being representative for that criteria would be likely 
to produce valid data.
    However, instead of sampling by practice or practitioner or type of 
service, a geographic approach to sampling (for example, sampling all 
practitioners in a selected state) could help to alleviate the need to 
stratify the sample on a long list of criteria. By using broad 
geographical areas from varied areas of the country, we believe our 
sample will capture data from practitioners who practice in a variety 
of settings, single and multispecialty practices, urban and rural, a 
variety of medical specialties, and practitioners operating in both 
academic and non-academic institutions. Surgeons interviewed for the G-
code development suggested that post-operative care might vary across 
these dimensions. A geographic approach could also mitigate some of the 
practical operational barriers. For example, we believe that by having 
all practitioners in the practice participate in reporting, we avoid 
concerns about incomplete data when a required reporter furnishes a 
procedure and another practitioner in the practice furnishes the post-
operative visits. A geographic approach also makes it easier to educate 
practitioners on data collection requirements.
    Comment: In response to operational difficulties with a 
representative sample, such as how to make sure participants were aware 
of the requirement to report and how to do so, one commenter stated 
that notifying a small targeted sample is a much smaller task than 
notifying the entire population of participating Medicare 
practitioners. They also stated that a targeted approach will encourage 
open dialogue between the participating practices and CMS, ensuring the 
data collected are reliable. Others suggested providing compensation 
for a sample of physicians to submit detailed data, would lead to 
capturing accurate data because they would more likely to understand 
and prioritize reporting because of their participation in this type of 
study.
    Response: We disagree that it is operationally easier to notify a 
small segment of broadly diverse practitioners than the entire 
population of practitioners unless that small segment has a degree of 
cohesiveness, such as being in the same geographic area or specialty. 
We have long appreciated the stakeholder community's collaboration in 
broad communication efforts. In general, we have found that when 
something affects a small number of providers it does not receive the 
same response from entities that are critical for widespread adoption 
such as associations, who are key purveyors of information, and those 
developing software systems. We appreciate the suggestion that 
interaction among those that need to report will facilitate compliance 
and the quality of the data. With regard to compensation, we note that 
the statute provided for a 5 percent withhold to encourage compliance 
and we chose not to propose to implement this provision.
    After consideration of the comments, we are finalizing a 
requirement for reporting that only applies to practitioners in 
selected states. In addition, those practicing only in small practices 
are excluded from required reporting. Those not required to report can 
do so voluntarily and we encourage them to do so.
Geographic Sample
    As we noted in the proposed rule, we do not have adequate data on 
what drives variations in the delivery of pre- and post-operative care 
to design a sampling methodology that is certain to be representative. 
We also believe that submission by all practitioners would be 
consistent with our extensive use of claims data for other PFS 
services. Additionally, we understand the statute directs us to gather 
data from more than a select group of practitioners based on any 
particular attributes, such as gathering data only from ``efficient'' 
practices, consistent with longstanding recommendations from MedPAC 
regarding limiting data collection. We also believed that there were 
significant operational impairments to data reporting by a limited 
sample of physicians. In consideration of these factors, we proposed to 
require reporting by all physicians to make sure that the data we 
obtained reflected all services furnished. In light of the comments 
regarding the burden that would be created by requiring reporting by 
all physicians and the data that was actually needed for valuation, we 
think that reporting by a subset of practitioners could provide us 
valuable information on the number of visits typically furnished in 
global periods. This data could enhance the information we currently 
use to establish values for these services. While we acknowledge that 
we believe the data under this less burdensome approach will provide 
less information than necessary for optimal valuation for these 
services, we believe that the information on the number of actual 
visits from a subset of practitioners is preferable to the information 
on which we currently rely, which is the results of survey data 
reflecting respondents' assessment of the number of visits considered 
to be typical.
    One commenter suggested that we could develop a geographic sample 
using a similar approach used by the Center for Medicare and Medicaid 
Innovation for the Comprehensive Care for Joint Replacement (CJR) or 
other proposed episode payment models, with an adjustment that would 
make certain we received data from rural, as well as urban areas. We 
reviewed these approaches and concluded that such an approach for 
sample selection could maximize the variability of the sample, mitigate 
some of our concerns, and provide a robust set of data for 
consideration.
    Commenters suggested a sample should include geographic diversity. 
Studies show that health care delivery patterns often vary between 
geographic areas and while we have no specific information that the 
number of post-operative visits varies by geographic areas, it seems 
prudent to gather data from a variety of geographic areas to determine 
if there is such variation and

[[Page 80221]]

to account for it in our data collection if it exists. In order to 
maximize the variability of our limited sample, we are using a 
methodology that requires reporting from practices in 9 states of 
various sizes and from various geographic areas of the country. We are 
using whole states for the geographic areas rather than MSAs as are 
used for the CJR and proposed for other models for several reasons. 
First, MSAs are not used for geographic adjustments under the PFS. 
Indeed, practitioners in most states receive state-wide geographic 
adjustments under the PFS. Additionally, an MSA-based approach would, 
by definition, not include large rural areas, something mentioned by 
many commenters as an important factor in variation in medical 
practice, and therefore, a critical criterion for sampling. Also, due 
to a variety of governmental and institutional requirements, the 
practice of medicine is primarily a state-based activity and thus the 
use of states will reduce the number of practitioners for whom we have 
only partial data based on geographic location. In contrast, we believe 
that practitioners often practice across county lines or in more than 
one MSA. We also believe that the state-wide approach will be helpful 
for compliance and education because there are state medical 
associations in every state and specialty associations in many.
    To make sure that we had states of a variety of sizes, we ranked 
states according to the number of Medicare beneficiaries in each state. 
We chose the number of Medicare beneficiaries to reflect the general 
need for Medicare services. We divided states into four groups: The top 
5 states in terms of the number of Medicare beneficiaries (group 1); 
6th through 15th largest states in terms Medicare beneficiaries (group 
2); the 16th through 25th largest states in terms of Medicare 
beneficiaries (group 3); and all remaining states (26 including the 
District of Columbia, group 4). The states in each group are:
     Group 1--California, Florida, New York, Pennsylvania & 
Texas.
     Group 2--Georgia, Illinois, Massachusetts, Michigan, New 
Jersey, North Carolina, Ohio, Tennessee, Virginia, and Washington.
     Group 3--Alabama, Arizona, Indiana, Kentucky, Louisiana, 
Maryland, Minnesota, Missouri, Wisconsin, and South Carolina.
     Group 4--Alaska, Arkansas, Colorado, Connecticut, District 
of Columbia, Delaware, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, 
Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, 
Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West 
Virginia and Wyoming.
    We also recorded the Census region for each state using the Census 
Bureau's nine regions (New England, Middle Atlantic, South Atlantic, 
East South Central, West South Central, East North Central, West North 
Central, Mountain, and Pacific). Puerto Rico and other territories were 
excluded.
    To ensure a mix of states in terms of size (measured by number of 
Medicare beneficiaries), we selected 1 state at random from group 1, 
followed by 2 states each at random from groups 2 and 3, and lastly 4 
states from group four. After each random selection, we eliminated the 
remaining states in the same Census region from the remaining groups 
for which selection was pending to maximize geographic variation in the 
selection of states. In the event that this process resulted in fewer 
than 9 selected states (for example if none of the three Middle 
Atlantic states--all in Group 1 and 2--were selected in the first three 
picks), the last selection(s) were made randomly from states in the 
remaining Census region from which selections previously had not been 
made.
    Practitioners located in the following states who meet the criteria 
for required reporting will be required to report the data discussed in 
this section of the final rule:
     Florida.
     Kentucky.
     Louisiana.
     Nevada.
     New Jersey.
     North Dakota.
     Ohio.
     Oregon.
     Rhode Island.
Exclusion for Practitioners in Small Practices
    In response to comment about the burden of our proposed requirement 
and the concern that the burden would result in the submission of data 
of poor quality, we are exempting practitioners who only practice in 
practices with fewer than 10 practitioners from the reporting. Based 
upon the comments, we believe larger practices are more likely to 
currently require practitioners to track all visits and often use CPT 
code 99024 to do so. Moreover, larger practices are more likely to have 
coding and billing staff that can more easily adapt to this claims-
based requirement. The combination of experience with reporting CPT 
code 99024 and the staff and resource base to devote to developing the 
infrastructure for such reporting will result in greater accuracy from 
such practitioners. By excluding practitioners who only practice in 
practices with fewer than 10 practitioners, we estimate that about 45 
percent of practitioners will not be required to report. In defining 
small practices, we reviewed other programs. We chose 10 practitioners 
as the threshold for reporting as practices of this size are large 
enough to support coding and billing staff, which will make this 
reporting less burdensome. Also, this is the same threshold used by the 
value-based modifier program for its phase-in of a new requirement 
because of concerns about the burden of small practices.
    For this purpose, we define practices as a group of practitioners 
whose business or financial operations, clinical facilities, records, 
or personnel are shared by two or more practitioners. For the purposes 
of this reporting requirement, such practices do not necessarily need 
to share the same physical address; for example, if practitioners 
practice in separate locations but are part of the same delivery system 
that shares business or financial operations, clinical facilities, 
records, or personnel, all practitioners in the delivery system would 
be included when determining if the practice includes at least 10 
practitioners. Because qualified non-physician practitioners may also 
furnish procedures with global periods, the exception for reporting 
post-operative visits applies only to practices with fewer than ten 
physicians and qualified non-physician practitioners regardless of 
specialty. We are including all practitioners and specialties in the 
count because the exception policy uses practice size as a proxy for 
the likely ability of the practice to meet the reporting requirements 
without undue administrative burden. We recognize that physicians and 
qualified non-physician practitioners furnish services under a variety 
of practice arrangements. In determining whether a practitioner 
qualifies for the exception based on size of the practice, all 
physicians and qualified non-physician practitioners that furnish 
services as part of the practice should be included. This would include 
all practitioners, regardless of whether they are furnishing services 
under an employment model, a partnership model, or an independent 
contractor model under which they practice as a group and share 
facility and other resources but continue to bill Medicare 
independently instead of reassigning benefits. We also recognize that 
practice size can fluctuate over the year and anticipate that practices 
will determine their eligibility for the exception based

[[Page 80222]]

on their expected staffing. Generally, practitioners in short-term 
locum tenens arrangements would not be included in the count of 
practitioners. When practitioners are also providing services in 
multiple settings, the count may be adjusted to reflect the estimated 
proportion of time spent in the group practice and other settings.
    Although this policy excludes a significant number of 
practitioners, a majority of the global procedures furnished will be 
included in the reporting requirements and thus we will have data on a 
majority of services.
    Several commenters also expressed concern that data from small 
practices be included to have complete information. If those practicing 
in small practices are motivated to report and either have the 
infrastructure to do so in place or the resources to develop such 
infrastructure, then, taken together, these attributes would minimize 
concerns with accuracy of data from small practices. Accordingly, we 
are encouraging, but not requiring, small practices to report the 
visits. As we collect data, we will explore mechanisms to appropriately 
use the voluntarily submitted claims data. Analysis of this and other 
data we are able to procure will allow us to assess whether the number 
of post-operative visits varies based upon the size of practice. To the 
extent that it does and that we do not have adequate data on the 
practice patterns in small practices from voluntarily submitted data 
and other sources, we will reconsider for future notice and comment 
rulemaking the exemption of practitioners in small practices from the 
reporting requirements.
    The claims data received from practitioners in these states will 
provide more information about the number of visits typically provided 
in post-operative periods than is available from any other source. 
Through analysis of this data, we hope to learn more about what drives 
variations in the delivery of post-operative care. Many of the 
characteristics that were suggested by commenters, such as size of 
practice, type of practice, geographic, urban/rural, academic, hospital 
based, specialty, etc., will be able to be evaluated using the claims 
data. Moreover, we hope to be able to stratify the data received based 
upon comparisons to the national characteristics so that the submitted 
claims data can contribute to improved valuation of PFS services.
    In summary, our claims-based data collection policy requires that, 
for procedures furnished on or after July 1, 2017, practitioners who 
practice in practices that includes of 10 or more practitioners in 
Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, 
Oregon, and Rhode Island will be required to report on claims data on 
post-operative visits furnished during the global period of a specified 
procedure using CPT code 99024. The specified procedures are those that 
are furnished by more than 100 practitioners and either are nationally 
furnished more than 10,000 times annually or have more than $10 million 
in annual allowed charges. The final list of codes subject to required 
reporting will be available on the CMS Web site. Although required 
reporting begins for global procedures furnished on or after July 1, 
2017, we encourage all practitioners to begin reporting for procedures 
furnished on or after January 1, 2017, if feasible. Similarly, we 
encourage those practicing in practices with fewer than 10 
practitioners to report data if they can do so.
(1) Survey of Practitioners
    We agreed with commenters on the CY 2016 proposed rule and at the 
listening session that we need more information than is currently 
provided on claims and that we should utilize a number of different 
data sources and collection approaches to collect the data needed to 
assess and revalue global surgery services. In addition to the claims-
based reporting, we proposed to survey a large, national sample of 
practitioners and their clinical staff in which respondents would 
report information about approximately 20 discrete pre-operative and 
post-operative visits and other global services like care coordination 
and patient training. This sample would be stratified based upon 
specialty and geography, as well as by physician volume (procedures 
billed) and practice setting. The proposed survey would produce data on 
a large sample of pre-operative and post-operative visits and is being 
designed so that we could analyze the data collected in conjunction 
with the claims-based data that we would be collecting. We expect to 
obtain data from approximately 5,000 practitioners.
    We noted that, if our proposal was finalized, RAND would develop 
and conduct this survey. RAND would also assist us in collecting and 
analyzing data for this survey and the claims-based data. While the 
primary data collection would be via a survey instrument, semi-
structured interviews would be conducted and direct observations of 
post-operative visits would occur in a small number of pilot sites to 
inform survey design, validate survey results, and collect information 
that is not conducive to survey-based reporting.
    Our proposed sampling approach would sample practitioners rather 
than specific procedures or visits to streamline survey data collection 
and minimize respondent burden. Specifically, we will use a random 
sample from a frame of practitioners who billed Medicare for more than 
a minimum threshold of surgical procedures with a 10- or 90-day global 
period (for example, 200 procedures) in the most recent available prior 
year of claims data. The sampling frame would provide responses from 
approximately 5,000 practitioners, stratified by specialty, geography, 
and practice type. Based upon preliminary analysis, we believe this 
number of participants will allow us to collect information on post-
operative care following the full range of CPT level-2 surgical 
procedure code groups. For many common types of post-operative visits, 
we anticipate a standard deviation of the time distribution at around 9 
minutes. To achieve a 95 percent confidence intervals with a width of 2 
minutes, we would need 311 reported post-operative visits per 
procedure/procedure group. The most comprehensive approach would be to 
sample sufficient practitioners to observe 311 post-operative visits 
for each HCPCS procedure, but this approach would be cost- and time-
prohibitive. Since post-operative care following similar procedures may 
involve similar activities and times even if there are differences in 
the number of visits, we proposed to sample differentially by specialty 
to maximize our ability to estimate attributes of post-operative care 
for the largest range of procedures.
    Sample sizes for each specialty will be determined on the basis of 
number of procedures billed by the specialty and number of 
practitioners billing, assuming a uniform distribution of procedures 
across the year, an average of 2 post-operative visits by each patient 
and an equal distribution of procedures across practitioners within a 
specialty. If the procedure represented only 5 percent of total billed 
procedures for the specialty, we could expect only one of 20 visits 
sampled and reported by each practitioner would be for the particular 
procedure, and thus we would need to sample 311 practitioners within 
the specialty to achieve the target precision level on estimated post-
operative visit time.
    We propose targeting 311 reporting practitioners from each 
specialty which is the only specialty contributing at least 5 percent 
of billings for any one

[[Page 80223]]

procedure group code, defined as procedures sharing a CPT level 2 
heading. For other specialties, the target will be defined by the 
maximum value of 311 divided by the number of specialties contributing 
at least 5 percent for any procedure group code for which that 
specialty contributes. The target sample size for a specialty will be 
capped at 25 percent of the eligible practitioners within the 
specialty. For example, if a specialty contributed to two procedure 
group codes, one of which had four contributing specialties and the 
other had three contributing specialties, the specialty of interest 
would have a target of 104 reporting practitioners (which is driven by 
the procedure group code that is tied to three specialties). These 
guidelines will target at least 311 reporting practitioners for each 
procedure group code, and result in a total target sample size of 4,872 
providers. A smaller sample size would reduce the precision of 
estimates from the survey and more importantly risk missing important 
differences in post-operative care for specific specialties or 
following different types of surgical procedures. We expect a response 
rate in excess of 50 percent. Given this response rate (and some 
uncertainty in this response rate estimate), we will need to approach 
at least 9,722 practitioners for our target of 4,872 practitioners. 
Should the response rate be lower than expected, we will continue to 
sample in waves until we reach the target of approximately 4,872 
practitioners. Non-response bias will be assessed by comparing 
available characteristics of non-respondents (for example, practice 
type, geography, procedure volume etc.) to those of respondents.
    We did not propose that respondents report on the entire period of 
post-operative care for individual patients, as a 90-day follow-up 
window (for surgeries currently with a 90-day global period) is too 
long to implement practically in this study setting and would be more 
burdensome to practitioners. Instead, we proposed to collect 
information on a range of different post-operative services resulting 
from surgeries furnished by the in-sample practitioner prior to or 
during a fixed reporting period.
    Practitioners will be asked to describe 20 post-operative visits 
furnished to Medicare beneficiaries or other patients during the 
reporting period. The information collected through the survey 
instrument, which will be developed based upon direct observation and 
discussions in a small number of pilot sites, will include contextual 
information to describe the background for the post-operative care, 
including, for example:
     Procedure codes(s) and date of service for procedure upon 
which the global period is based.
     Procedure place of service.
     Whether or not there were complications during or after 
the procedure.
     The number in sequence of the follow-up visit (for 
example, the first visit after the procedure).
    The survey instrument will also collect information on the visit in 
question including, for example:
     Which level of visit using existing billing codes.
     Specific face-to-face and non-face-to-face activities 
furnished on the day of the visit.
     The total time spent on face-to-face and non-face-to-face 
activities on the day of the visit.
     Direct practice expense items used during the visit, for 
example supplies like surgical dressings and clinical staff time.
    Finally, the instrument will ask respondents to report other prior 
or anticipated care furnished to the patient by the practice outside of 
the context of a post-operative visit, for example non-face-to-face 
services.
    The survey approach will complement the claims data collection by 
collecting detailed information on the activities, time, intensity, and 
resources involved in delivering global services. The resulting visit-
level survey data would allow us to explore in detail the variation in 
activities, time, intensity, and resources associated with global 
services within and between physicians and procedures, and would help 
to validate the information gathered through claims. A summary of the 
work that RAND would be doing is available on the CMS Web site under 
downloads for the CY 2017 PFS proposed rule with comment period at 
http://www.cms.gov/physicianfeesched/downloads/.
    The following is a summary of the comments that we received on our 
proposal to conduct a survey of practitioners furnishing 10- and 90-day 
global services to obtain information about the face-to-face activities 
and other activities included in post-operative care.
    Comment: Most commenters were generally supportive of the survey 
effort and noted that the provider survey will collect useful 
information on the level of visits, as well as important contextual 
detail that will not be available from the claims-based reporting. One 
commenter stated that a limited approach through surveys of physicians 
and practices looking at a targeted selection of services, and using 
CPT code 99024 for the claims based component would yield meaningful 
and actionable data for the agency and stakeholders.
    Response: We agree that the survey portion of the data collection 
approach will provide useful information on level and context. The 
survey will complement claims-based reporting and will provide us with 
important information on non-face-to-face activities and other 
activities that are not reported with CPT code 99024.
    Comment: One commenter pointed out challenges in survey response 
and in estimating time for visits by aggregating practitioner time 
estimates for specific activities.
    Response: While we have not finalized the design of the survey 
instrument, we are aware of challenges in collecting detailed time 
estimates for specific activities. We do not intend to sum estimated 
times for specific activities to arrive at a total duration for the 
visit. We also recognize the challenges related to survey response 
rates and are working with our contractor accordingly.
    Comment: Several commenters suggested that the survey effort should 
not target all 4,200 procedure codes.
    Response: The survey component of the data collection effort is not 
designed to collect information on visits following all global 
procedure codes. Rather, we expect the sample to be stratified by 
specialty and to result in a sufficient qualitative data to address key 
procedures in each specialty furnishing procedures with global periods.
    Comment: Some commenters believed that the purpose of the direct 
observation component of the data collection effort was unclear.
    Response: The direct observation component will consist of external 
observers capturing the activities conducted in a sample of post-
operative visits at a small number of practices. It is designed to 
provide additional context to inform future data collection efforts and 
to gauge where the practitioner survey does or does not capture the 
full range of activities. It is not a data collection activity per se.
    After consideration of the comments, we are finalizing our proposal 
to conduct a survey of practitioners to gain information on post-
operative activities to supplement our claims-based data collection as 
proposed. We expect that the survey will be in the field mid-2017.
(2) Required Participation in Data Collection
    Using the authority we are provided under sections 1848(c)(8) and

[[Page 80224]]

1848(c)(2)(M) of the Act, we proposed to require all practitioners who 
furnish a 10- or 90-day global service to submit a claim(s) providing 
information on all services furnished within the relevant global 
service period in the form and manner described in this section of the 
final rule, beginning with surgical or procedural services furnished on 
or after January 1, 2017. We also proposed to require participation by 
practitioners selected for the broad-based survey through which we 
proposed to gather additional data needed to value surgical services, 
such as the clinical labor and equipment involved that cannot be 
efficiently collected on claim (see below).
    Given the importance of the proposed survey effort, making sure 
that we get valid data is critical. By eliminating the bias that would 
be associated with using only data reported voluntarily, we stated that 
we expected to get more accurate and representative data. In addition 
to the potential bias inherent in voluntary surveys, we expressed 
concern that relying on voluntary data reporting would limit the 
adequacy of the volume of data we obtain, would require more effort to 
recruit participants, and may make it impossible to obtain data for 
valuation for CY 2019 as required by the statute.
    Based on our previous experience with requesting voluntary 
cooperation in data collection activity, voluntary participation poses 
a significant challenge in collection and use of data. Specifically, 
the Urban Institute's work (under contract with us) to validate work 
RVUs by conducting direct observation of the time it took to furnish 
certain elements of services paid under the physician fee schedule 
provides evidence of this challenge. (See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/RVUs-Validation-Urban-Interim-Report.pdf for an interim report that 
describes challenges in securing participation in voluntary data 
collection.) Similarly, we routinely request invoices on equipment and 
supplies that are used in furnishing PFS services and often receive no 
more than one invoice. These experiences support the idea that 
mandatory participation in data collection activities is essential if 
we are to collect valid and unbiased data.
    Section 1848(a)(9) of the Act authorizes us, through rulemaking, to 
withhold payment of up to 5 percent of the payment for services on 
which the practitioner is required to report under section 
1848(c)(8)(B)(i) of the Act until the practitioner has completed the 
required reporting. Some commenters opposed the imposition of this 
payment consequence for failure to report, and others stated that it 
was too large a penalty. While withholding a portion of payment would 
encourage practitioners to report the required information, we did not 
propose to implement this option for CY 2017. We stated that requiring 
physicians to report the information on claims, combined with the 
incentive to report complete information so that revaluations of 
payment rates for global services are based on accurate data, would 
result in compliance with the reporting requirements. However, we noted 
that if we find that compliance with required claims-based reporting is 
not acceptable, we would consider in future rulemaking imposing up to a 
5 percent payment withhold as authorized by the statute.
    Consistent with the requirements of section 1848(c)(2)(M) of the 
Act, should the data collected under this requirement be used to 
determine RVUs, we will disclose the information source and discuss the 
use of such information in such determination of relative values 
through future notice and comment rulemaking.
    The following is a summary of the comments we received on our 
proposal to require reporting in the claims-based survey and 
participation in the survey.
    Comment: Many commenters objected overall to the administrative 
burden of our proposal and questioned the need for some of the data we 
were proposing to collect, primarily through the claims-based 
reporting, and made many recommendations for less burdensome data 
collection to achieve our goals. Some objected to any claims-based 
reporting at this time. A few recommended a different approach that 
involved collecting information from a small number of practices that 
agree to participate and that we pay such practices for participation. 
However, none recommended that we go forward with data collection on a 
totally voluntary basis. Some indicated concern that practitioners 
would not provide required information.
    Response: We appreciate the many ideas for how to improve our data 
collection effort, particularly those that provided information on how 
to collect the information that we need while imposing a lower 
administrative burden on practitioners.
    Comment: A few commenters supported our not proposing to implement 
the 5 percent withhold until claims on the post-operative care were 
submitted.
    Response: We appreciate the support of commenters.
    After considering the comments, we are finalizing our proposal to 
require participation in the claims-based reporting. It should be 
noted, however, due to our modifying the requirement to apply only to 
those identified as part of the geographic sample, on selected 
procedures, using one code, and exempting those practicing in groups 
with fewer than 10 practitioners, as discussed above, the impact of the 
requirement is significantly reduced overall, including for the subset 
of practitioners who will have to report under the finalized 
requirements.
    We are not implementing the statutory provision that authorizes a 5 
percent withhold of payment for the global services until claims are 
filed for the post-operative care, if required. We reiterate that 
should we find that compliance with required claims-based reporting 
limits confidence in the use of the information for improving the 
accuracy of payments for the global codes, we would consider in future 
rulemaking imposing up to a 5 percent payment withhold as authorized by 
the statute.
(3) Data Collection From Accountable Care Organizations (ACOs)
    We are particularly interested in knowing whether physicians and 
practices affiliated with ACOs expend greater time and effort in 
providing post-operative global services in keeping with their goal of 
improving care coordination for their assigned beneficiaries. ACOs are 
organizations in which practitioners and hospitals voluntarily come 
together to provide high-quality and coordinated care for their 
patients. Because such organizations share in the savings realized by 
Medicare, their incentive is to minimize post-operative visits while 
maintaining high quality post-operative care for patients. In addition, 
we believe that such organizations offer us the opportunity to gain 
more in-depth information about delivery of surgical services.
    We proposed to collect data on the activities and resources 
involved in delivering services in and around surgical events in the 
ACO context by surveying a small number of ACOs (Pioneer and Next 
Generation ACOs). Similar to the approach of the more general 
practitioner survey, this effort would begin with an initial phase of 
primary data collection using a range of methodologies in a small 
number of ACOs; development, piloting, and validation of an additional 
survey module specific to ACOs. A survey of practitioners participating 
in approximately 4 to 6 ACOs using the

[[Page 80225]]

survey instrument along with the additional ACO-specific module will be 
used to collect data from on pre- and post-operative visits.
    The following is summary of the comments we received about our 
proposal for data ACO data collection.
    Comment: Several commenters supported a separate survey of 
practitioners participating in ACOs. One commenter agreed with CMS that 
this data collection effort may provide a unique and useful perspective 
on the matter at hand. Several commenters indicated that there are 
likely differences in pre- and post-operative care between 
practitioners who do participate in ACOs and those that do not. One 
commenter cautioned against extrapolating information gathered from 
ACOs to value global surgery services that are provided outside of the 
ACO setting because ACOs are structured differently than other practice 
settings and data from ACOs may, therefore, be skewed [and] that ACO 
participants typically are larger practices and thus would 
underrepresent smaller or solo practitioners.
    Response: We agree that ACOs may be structured differently than 
other practice settings and that these differences may contribute to 
variations in the provision of outpatient care. By separately surveying 
ACOs we will be able to investigate whether there are differences in 
pre- and post-operative care in ACO settings compared to non-ACO 
settings.
    After consideration of the comments received, we are finalizing our 
proposal for data collection in ACOs. We recognize and will continue to 
consider the concerns raised by commenters as we implement this 
project.
(6) Re-Valuation Based Upon Collected Data
    We recognize that the some of the data collection activities being 
undertaken vary from how information is currently gathered to support 
PFS valuations for global surgery services. However, we believe the 
proposed claims-based data collection is generally consistent with how 
claims data is reported for other kinds of services paid under the PFS. 
We believe that the authority and requirements included in the statute 
through the MACRA and PAMA were intended to expand and enhance data 
that might be available to enhance the accuracy of PFS payments. In the 
proposed rule, we indicated that because these are new approaches to 
collecting data and in an area--global surgery--where very little data 
has previously been collected, we cannot describe exactly how this 
information would be used in valuing services. What is clear is that 
the claims-based data would provide information parallel to the kinds 
of claims-data used in developing RVUs for other PFS services and that 
by collecting these data, we would know far more than we do now about 
how post-operative care is delivered and gain insight to support 
appropriate packaging and valuation. We would include any revaluation 
proposals based on these data in subsequent notice and comment 
rulemaking.
    Even though we did not make a proposal regarding how future re-
valuations would use the data collected under these proposals, we 
received several comments on such revaluations. The following is 
summary of the comments we received regarding use of the data we obtain 
through this three-pronged data collection activity in future re-
valuations.
    Comment: Some commenters stated that the RUC process worked well to 
value services and should continue to be used to value these and other 
services. Some of these objected to any claims-based data collection 
for a variety of reasons including that it was unlikely to provide 
valid and reliable data, that the RUC process worked well and should 
continue to be used, and the that since other codes would not be valued 
on the basis of similar data use of this data would harm the fee 
schedule's relativity. Some suggested that we use the data obtained 
here to identify misvalued codes and refer them to the RUC for further 
evaluation under the usual process. Some commenters suggested that we 
not collect any data until we could describe how it would be used.
    Response: We believe that the Congress enacted the two data 
collection provisions included in the Act to further the accuracy of 
PFS rates by having additional data available to the RUC as it makes 
recommendations to us and to us to inform our evaluation of those 
recommendations. We do not believe this data collection was intended to 
replace the RUC or the processes that have been established over the 
last two decades for valuing physician services. We agree with 
commenters that one way the data might be used is to identify 
potentially misvalued codes for the RUC to evaluate. However, we also 
stress that we do not agree that the use of claims data to value 
services within global surgery packages would be inconsistent with the 
valuation of other PFS services. On the contrary, very few other PFS 
services include estimated work RVUs based on face-to-face patient 
encounters over multiple days or months. Outside of these services, 
work RVUs are estimated per patient encounter (or in other cases over 
longer periods of time for non-face-to-face work). Therefore, the outer 
limit of any misvaluation between the estimated typical and the actual 
is the overall value for a single face-to-face service. Under the 
global packages, potential misvaluations can range from the difference 
between the estimated typical services for a full global period and the 
actual services furnished for a full global period for a given patient. 
We are not finalizing any provisions regarding valuation of global 
surgical services. Instead, such issues will be addressed in future 
rulemaking after we collect data and analyze data.

E. Improving Payment Accuracy for Primary Care, Care Management and 
Patient-Centered Services

1. Overview
    In recent years, we have undertaken ongoing efforts to support 
primary care and patient-centered care management within the PFS as 
part of HHS' broader efforts to achieve better care, smarter spending 
and healthier people through delivery system reform. We have recognized 
the need to improve payment accuracy for these services over several 
years, especially beginning in the CY 2012 PFS proposed rule (76 FR 
42793) and continuing in each subsequent year of rulemaking. In the CY 
2012 proposed rule, we acknowledged the limitations of the current code 
set that describes evaluation and management (E/M) services within the 
PFS. For example, E/M services represent a high proportion of PFS 
expenditures, but have not been recently revalued to account for 
significant changes in the disease burden of the Medicare patient 
population and changes in health care practice that are underway to 
meet the current population's health care needs. These trends in the 
Medicare population and health care practice have been widely 
recognized in the provider community and by health services researchers 
and policymakers alike.\1\ We believe the focus of the

[[Page 80226]]

health care system has shifted to delivery system reforms, such as 
patient-centered medical homes, clinical practice improvement, and 
increased investment in primary and comprehensive care management/
coordination services for chronic and other conditions. This shift 
requires more centralized management of patient needs and extensive 
care coordination among practitioners and providers, often on a non-
face-to-face basis across an extended period of time. In contrast, the 
current CPT code set is designed with an overall orientation to pay for 
discrete services and procedural care as opposed to ongoing primary 
care, care management and coordination, and cognitive services. It 
includes thousands of separately paid, individual codes, most of which 
describe highly specialized procedures and diagnostic tests, while 
there are relatively few codes that describe care management and 
cognitive services. The term ``cognitive services'' refers to the type 
of work that is usually classified and described under the current code 
set for E/M services, such as the critical thinking involved in data 
gathering and analysis, planning, management, decision-making, and 
exercising judgment in ambiguous or uncertain situations.\2\ It is 
often used to describe PFS services that are not procedural or strictly 
diagnostic in nature. Further, in the past, we have not recognized as 
separately payable many existing CPT codes that describe care 
management and cognitive services, viewing them as bundled and paid as 
part of other services including the broadly drawn E/M codes that 
describe face-to-face visits billed by physicians and practitioners in 
all specialties.
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    \1\ See, for example, http://content.healthaffairs.org/content/25/5/w378.full; http://www.commonwealthfund.org/publications/issue-
briefs/2008/feb/how-disease-burden-influences-medication-patterns-
for-medicare-beneficiaries--implications-for-polic; http://www.hhs.gov/ash/about-ash/multiple-chronic-conditions/index.html; 
http://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article; https://www.pcpcc.org/about; https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html.
    \2\ http://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article.
---------------------------------------------------------------------------

    This has resulted in minimal service variation for ongoing primary 
care, care management and coordination, and cognitive services relative 
to other PFS services, and in potential misvaluation of E/M services 
under the PFS (76 FR 42793). Some stakeholders believe that there is 
substantial misvaluation of physician work within the PFS, and that the 
current service codes fail to capture the range and intensity of 
nonprocedural physician activities (E/M services) and the ``cognitive'' 
work of certain specialties (http://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article).
    Recognizing the inverse for specialties that furnish other kinds of 
services, MedPAC has noted that the PFS allows some specialties to more 
easily increase the volume of services they provide, and therefore, 
their revenue from Medicare relative to other specialties, particularly 
those that spend most of their time providing E/M services. (MedPAC 
March 2015 Report to the Congress, available at http://www.medpac.gov/-documents-/reports). We agree with this analysis, and we recognize that 
the current set of E/M codes limits Medicare's ability under the PFS to 
appropriately recognize the relative resource costs of primary care, 
care management/coordination and cognitive services relative to 
specialized procedures and diagnostic tests.
    In recent years, we have been engaged in an ongoing incremental 
effort to update and improve the relative value of primary care, care 
management/coordination, and cognitive services within the PFS by 
identifying gaps in appropriate payment and coding. These efforts 
include changes in payment and coding for a broad range of PFS 
services. This effort is particularly vital in the context of the 
forthcoming transition to the Quality Payment Program that includes the 
Merit-Based Incentive Payment System (MIPS) and Alternative Payment 
Models (APMs) incentives under the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted April 16, 
2015), since MIPS and many APMs will adopt and build on PFS coding, 
RVUs and PFS payment as their foundation.
    In CY 2013, we began by focusing on post-discharge care management 
and transition of beneficiaries back into the community, establishing 
new codes to pay separately for transitional care management (TCM) 
services. Next we finalized new coding and separate payment beginning 
in CY 2015 for chronic care management (CCM) services provided by 
clinical staff. In the CY 2016 PFS proposed rule (80 FR 41708 through 
41711), we solicited public comments on three additional policy areas 
of consideration: (1) Improving payment for the professional work of 
care management services through coding that would more accurately 
describe and value the work of primary care and other cognitive 
specialties for complex patients (for example, monthly timed services 
including care coordination, patient/caregiver education, medication 
management, assessment and integration of data, care planning); (2) 
establishing separate payment for collaborative care, particularly, how 
we might better value and pay for robust inter-professional 
consultation between primary care physicians and psychiatrists 
(developing codes to describe and provide payment for the evidence-
based psychiatric collaborative care model (CoCM)), and between primary 
care physicians and other (non-mental health) specialists; and (3) 
assessing whether current PFS payment for CCM services is adequate and 
whether we should reduce the administrative burden associated with 
furnishing and billing these services.
    We received substantial feedback on this comment solicitation, 
which we summarized in the CY 2017 PFS proposed rule and used to 
develop the following coding and payment proposals for CY 2017 (81 FR 
46200 through 46215, and 46263 through 46265):
     Separate payment for existing codes describing prolonged 
E/M services without direct patient contact by the physician (or other 
billing practitioner), and increased payment for prolonged E/M services 
with direct patient contact by the physician (or other billing 
practitioner) adopting the RUC-recommended values.\3\
---------------------------------------------------------------------------

    \3\ ``Without direct patient contact'' and ``with direct patient 
contact'' in this sentence are the terms used in the CPT code 
descriptor or prefatory language for these prolonged E/M services.
---------------------------------------------------------------------------

     New coding and payment mechanisms for behavioral health 
integration (BHI) services including substance use disorder treatment, 
specifically three codes to describe services furnished as part of the 
psychiatric CoCM and one code to address other BHI care models.
     Separate payment for complex CCM services, reduced 
administrative burden for CCM, and an add-on code to the visit during 
which CCM is initiated (the CCM initiating visit) to reflect the work 
of the billing practitioner in assessing the beneficiary and 
establishing the CCM care plan.
     A new code for cognition and functional assessment and 
care planning, for treatment of cognitive impairment.
     An adjustment to payment for routine visits furnished to 
beneficiaries for whom the use of specialized mobility-assistive 
technology (such as adjustable height chairs or tables, patient lifts, 
and adjustable padded leg supports) is medically necessary.
    We noted that the development of coding for these and other kinds 
of services across the PFS is typically an iterative process that 
responds to changes in medical practice and may be best refined over 
several years, with PFS rulemaking and the development of CPT codes as 
important parts of that process. We noted with interest that the CPT 
Editorial Panel and AMA/RUC restructured the former Chronic Care 
Coordination Workgroup to establish a

[[Page 80227]]

new Emerging CPT and RUC Issues Workgroup that we hope will continue to 
consider the issues raised in this section of our CY 2017 proposed 
rule. At the time of publication of the proposed rule, we were aware 
that CPT had approved a code to describe assessment and care planning 
for treatment of cognitive impairment; however, it would not be ready 
in time for valuation in CY 2017. Therefore, we proposed to make 
payment using a G-code (G0505 \4\) for this service in CY 2017. We were 
also aware that CPT had approved three codes that describe services 
furnished consistent with the psychiatric CoCM, but that they would 
also not be ready in time for valuation in CY 2017. We discuss these 
services in more detail in the next section of this final rule.
---------------------------------------------------------------------------

    \4\ We note that we used placeholder codes (GPPP1, GPPP2, GPPP3, 
GPPPX, GPPP6, GPPP7, and GDDD1) in the proposed rule. In order to 
avoid confusion, we have replaced those codes with those that have 
been finalized as part of the 2017 HCPCS set, even when describing 
the language in the proposed rule.
---------------------------------------------------------------------------

    To facilitate separate payment for these services furnished to 
Medicare beneficiaries during CY 2017, we proposed to make payment 
through the use of three G-codes (G0502, G0503, and G0504--see below) 
that parallel the new CPT codes, as well as a fourth G-code (G0507--see 
below) to describe services furnished using other models of BHI in the 
primary care setting. We intended for these to be temporary codes and 
would consider whether to adopt and establish values for the new CPT 
codes under our standard process, potentially for CY 2018. We 
anticipated continuing the multi-year process of implementing 
initiatives designed to improve payment for, and recognize long-term 
investment in, primary care, care management and cognitive services, 
and patient-centered services. While we recognized that there may be 
some overlap in the patient populations for the proposed new codes, we 
noted that time spent by a practitioner or clinical staff could not be 
counted more than once for any code (or assigned to more than one 
patient), consistent with PFS coding conventions. We expressed 
continued consideration of additional codes for CCM services that would 
describe the time of the physician or other billing practitioner. We 
also expressed interest in whether there should be changes under the 
PFS to reflect additional models of inter-professional collaboration 
for health conditions, in addition to those we proposed for BHI.
    We proposed to pay under the PFS for services described by new 
coding as follows (please note that the descriptions included for 
G0502, G0503, and G0504 are from Current Procedural Terminology 
(CPT[supreg]) Copyright 2016 American Medical Association (and we 
understand from CPT that they will be effective as part of CPT codes 
January 1, 2018). All rights reserved):
     G0502: Initial psychiatric collaborative care management, 
first 70 minutes in the first calendar month of behavioral health care 
manager activities, in consultation with a psychiatric consultant, and 
directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Outreach to and engagement in treatment of a patient directed by 
the treating physician or other qualified health care professional;
    ++ Initial assessment of the patient, including administration of 
validated rating scales, with the development of an individualized 
treatment plan;
    ++ Review by the psychiatric consultant with modifications of the 
plan if recommended;
    ++ Entering patient in a registry and tracking patient follow-up 
and progress using the registry, with appropriate documentation, and 
participation in weekly caseload consultation with the psychiatric 
consultant; and
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies.
     G0503: Subsequent psychiatric collaborative care 
management, first 60 minutes in a subsequent month of behavioral health 
care manager activities, in consultation with a psychiatric consultant, 
and directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Tracking patient follow-up and progress using the registry, with 
appropriate documentation;
    ++ Participation in weekly caseload consultation with the 
psychiatric consultant;
    ++ Ongoing collaboration with and coordination of the patient's 
mental health care with the treating physician or other qualified 
health care professional and any other treating mental health 
providers;
    ++ Additional review of progress and recommendations for changes in 
treatment, as indicated, including medications, based on 
recommendations provided by the psychiatric consultant;
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies;
    ++ Monitoring of patient outcomes using validated rating scales; 
and relapse prevention planning with patients as they achieve remission 
of symptoms and/or other treatment goals and are prepared for discharge 
from active treatment.
     G0504: Initial or subsequent psychiatric collaborative 
care management, each additional 30 minutes in a calendar month of 
behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional (List separately in addition to code 
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
     G0507: Care management services for behavioral health 
conditions, at least 20 minutes of clinical staff time, directed by a 
physician or other qualified health care professional time, per 
calendar month.
     G0505: Cognition and functional assessment using 
standardized instruments with development of recorded care plan for the 
patient with cognitive impairment, history obtained from patient and/or 
caregiver, by the physician or other qualified health care professional 
in office or other outpatient setting or home or domiciliary or rest 
home.
     G0506: Comprehensive assessment of and care planning by 
the physician or other qualified health care professional for patients 
requiring chronic care management services, including assessment during 
the provision of a face-to-face service (billed separately from monthly 
care management services) (Add-on code, list separately in addition to 
primary service).
     G0501: Resource-intensive services for patients for whom 
the use of specialized mobility-assistive technology (such as 
adjustable height chairs or tables, patient lifts, and adjustable 
padded leg supports) is medically necessary and used during the 
provision of an office/outpatient evaluation and management visit (Add-
on code, list separately in addition to primary procedure).
    Regarding the majority of these proposals, the public comments were 
broadly supportive, some viewing our proposals as a temporary solution 
to an underlying need to revalue E/M services, especially outpatient E/
M. Several commenters recommended that CMS utilize the global surgery 
data collection effort or another major research initiative to 
distinguish and revalue different kinds of E/M work.

[[Page 80228]]

The commenters made recommendations about the scope and definition of 
the proposed services, what types of individuals should be able to 
provide them, and potential alignment and overlap. The commenters 
agreed with the need to increase the relative value of primary care, 
care management and other cognitive care under the PFS and minimize 
administrative burden for such services, while ensuring value to the 
program and beneficiaries. The public comments raise or inform a number 
of issues around how to define and pay for care that is collaborative, 
integrative or continuous, and we discuss the comments in greater 
detail below.
2. Non-Face-to-Face Prolonged Evaluation & Management (E/M) Services
    In public comments on the CY 2016 PFS proposed rule, many 
commenters recommended that CMS should establish separate payment for 
non-face-to-face prolonged E/M service codes that we currently consider 
to be ``bundled'' under the PFS (CPT codes 99358, 99359). The CPT 
descriptors are:
     CPT code 99358 (Prolonged evaluation and management 
service before and/or after direct patient care, first hour); and
     CPT code 99359 (Prolonged evaluation and management 
service before and/or after direct patient care, each additional 30 
minutes (List separately in addition to code for prolonged service).
    Commenters believed that separate payment for these existing CPT 
codes would provide a means for physicians and other billing 
practitioners to receive payment that more appropriately accounts for 
time that they spend providing non-face-to-face care. We agreed that 
these codes would provide a means to recognize the additional resource 
costs of physicians and other billing practitioners, when they spend an 
extraordinary amount of time outside of an E/M visit performing work 
that is related to that visit and does not involve direct patient 
contact (such as extensive medical record review, review of diagnostic 
test results or other ongoing care management work). We also believed 
that doing so in the context of the ongoing changes in health care 
practice to meet the current population's health care needs would be 
beneficial for Medicare beneficiaries and consistent with our 
overarching goals related to patient-centered care.
    These non-face-to-face prolonged service codes are broadly 
described (although they include only time spent personally by the 
physician or other billing practitioner) and have a relatively high 
time threshold (the time counted must be an hour or more beyond the 
usual service time for the primary or ``companion'' E/M code that is 
also billed). They are not reported for time spent in care plan 
oversight services or other non-face-to-face services that have more 
specific codes and no upper time limit in the CPT code set. We believed 
this made these codes sufficiently distinct from the other codes we 
proposed for CY 2017 as part of our primary care/cognitive care/care 
management initiative described in this section of our final rule. 
Accordingly, we proposed to recognize CPT codes 99358 and 99359 for 
separate payment under the PFS beginning in CY 2017. We noted that time 
could not be counted more than once towards the provision of CPT codes 
99358 or 99359 and any other PFS service. We addressed their valuation 
in the valuation section of the CY 2017 proposed rule.
    Through a drafting error, we stated in the proposed rule that we 
would require these services to be furnished on the same day by the 
same physician or other billing practitioner as the companion E/M code. 
We intended to propose conformity with CPT guidance that requires that 
time counted towards the codes describe services furnished during a 
single day directly related to a discrete face-to-face service that may 
be provided on a different day, provided that the services are directly 
related to those furnished in a face-to-face visit.
    We also solicited public comment on our interpretation of existing 
CPT guidance governing concurrent billing or overlap of CPT codes 99358 
and 99359 with complex CCM services (CPT codes 99487 and 99489) and TCM 
services (CPT codes 99495 and 99496). Specifically CPT provides, ``Do 
not report 99358, 99359 during the same month with 99487-99489. Do not 
report 99358, 99359 when performed during the service time of codes 
99495 or 99496.'' Complex CCM services and TCM services are similar to 
the non-face-to-face prolonged services in that they include 
substantial non-face-to-face work by the billing physician or other 
practitioner. The TCM and CCM codes similarly focus on a broader 
episode of patient care that extends beyond a single day, although they 
have a monthly service period and the prolonged service codes do not. 
We sought public input on the intersection of the non-face-to-face 
prolonged service codes with CCM and TCM services, and with the 
proposed add-on code to the CCM initiating visit G0506 (Comprehensive 
assessment of and care planning for patients requiring CCM services). 
We also solicited comment regarding how distinctions could be made 
between time associated with prolonged services and the time bundled 
into other E/M services, particularly pre- and post-service times, 
which would continue to be bundled with the other E/M service codes. 
For all of these services, we expressed concern that there would 
potentially be program integrity risks as the same or similar non-face-
to-face activities could be undertaken to meet the billing requirements 
for a number of codes. We solicited public comment to help us identify 
the full extent of program integrity considerations, as well as options 
for mitigating program integrity risks.
    Comment: Many commenters recommended that we adopt the CPT coding 
provision for CPT codes 99358 and 99359 that allows the prolonged 
services to be provided on a different day than the companion E/M code. 
At the same time, several commenters indicated that they request 
changes to the codes through the established processes of the CPT 
Editorial Panel. For example, some commenters suggested that CPT codes 
99358 and 99359 should be revised so that they have a limited (calendar 
month) service period or measure shorter time increments (15 minutes). 
Some commenters recommended that a given physician should not be 
allowed to report CPT codes 99358 and 99359 for the same beneficiary 
during the same time he or she reported CCM, TCM, or G0506. These 
commenters stated that CCM, TCM, and proposed G0506 encompass non-face-
to-face care provided to the beneficiary during a given period of time 
that would be duplicated if the physician is also allowed to report CPT 
codes 99358 and 99359 during the same time period. Other commenters 
stated that it would be unusual for G0506 and non-face-to-face 
prolonged services (CPT codes 99358 and 99359) to be reported for 
services on the same day, but that both should be allowed if time 
thresholds are met. To facilitate determination of whether time 
thresholds are met for various potential code combinations, some 
commenters recommended that CMS establish a time for G0506 and publish 
typical times for the companion codes to the prolonged service codes. 
This would enable practitioners to determine when they have exceeded 
``usual'' or average times for E/M services and may bill prolonged 
services. Some commenters recommended that CMS provide tables

[[Page 80229]]

showing times for E/M visits, CCM, G0506 and prolonged services with 
specific clinical examples for concurrent billing.
    Some commenters believed there might be some overlap between the 
proposed non-face-to-face prolonged service codes and the post-service 
work of G0505 (Cognition and functional assessment by the physician or 
other qualified health care professional in office or other 
outpatient). Some commenters believed there is a discrepancy between 
our proposal to allow G0505 to be a companion code to prolonged 
services, and CPT's intent that G0505 should only be billed on the same 
day as another E/M visit if they are unrelated.
    MedPAC commented that the companion E/M codes should be revalued 
instead of providing separate payment for prolonged services associated 
with the companion codes. However, if we finalize as proposed, MedPAC 
recommended that we clarify what situations the prolonged codes are 
appropriate for, beyond average times. Another commenter recommended an 
alternative policy instead of the non-face-to-face prolonged service 
codes, namely several modifiers and add-on codes to E/M services, 
associated with increased work RVUs. A typical time for the primary 
service would not need to be established. This coding schema would 
focus on visits actively treating patients with four or more chronic 
conditions; patients with three or more chronic problems introducing an 
acute problem during their visit; unexpected abnormal studies; and 
electronic communication after visits with the patient, lab, and other 
clinicians. One commenter drew a distinction between prolonged service 
work and care management services, where care management does not 
include extensive review of medical records, review of diagnostic tests 
and further discussion with a caregiver.
    Response: We appreciate the comments. First, we had intended to 
propose to adopt the CPT coding provision for CPT codes 99358 and 99359 
that allows the prolonged time to be provided on a different day than 
the companion E/M code, along with the rest of the CPT prefatory 
language for these codes. Our final policy will adopt the CPT guidance 
that allows the prolonged time to be reported for time on a different 
day than the companion E/M code, along with the rest of the CPT 
prefatory language for CPT codes 99358 and 99359.
    Second, the public comments elucidate that it is difficult to 
assess potential overlap between prolonged services and many other 
codes because the included services, service periods and timeframes are 
not aligned. For example, most services paid under the PFS are valued 
based on assumptions regarding the typical pre-service, intra-service 
and post-service time, but do not have required thresholds for time 
spent. It is difficult to distinguish the times associated with these 
services from the times for codes that include time requirements in 
their descriptor. It is also difficult to distinguish the time and 
other work included in codes that generally describe services furnished 
during one day (prolonged services and E/M visits) with codes that 
describe time and work over substantially different service periods 
(such as the calendar month services like CCM or BHI services) or add-
on codes with no pre or post-service time (such as G0506). In addition, 
because portions of many services are likely describing work that is 
furnished ``incident to'' a physician's or practitioner's services, the 
time and effort of the billing practitioner may not be the only 
relevant time and effort to consider. Moreover, the comments reflect a 
desire and intent on the part of stakeholders to alter the prolonged 
service codes in the near future, which would, in turn, alter their 
intersection with the codes proposed in this section of our 2017 rule 
and many other codes. The public comments also reflect a lack of 
consensus regarding appropriate medical practice and reporting patterns 
for prolonged services in relation to the services described by the 
CCM, TCM, proposed G0505 and proposed G0506 codes.
    Having considered this feedback, we have decided to finalize our 
proposal for separate payment of the non-face-to-face prolonged service 
codes (CPT 99358, 99359) and adopt the CPT code descriptors and 
prefatory language for reporting these services. We stress that we 
intend these codes to be used to report extended non-face-to-face time 
that is spent by the billing physician or other practitioner (not 
clinical staff) that is not within the scope of practice of clinical 
staff, and that is not adequately identified or valued under existing 
codes or the 2017 finalized new codes. We appreciate the commenters' 
suggestion to display the typical times associated with relevant 
services. We have posted a file that notes the times assumed to be 
typical for purposes of PFS rate-setting. That file is available on our 
Web site under downloads for the CY 2017 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We note that 
while these typical times are not required to bill the displayed codes, 
we would expect that only time spent in excess of these times would be 
reported under a non-face-to-face prolonged service code.
    Based on our analysis of comments, we do not believe there is 
significant overlap between CPT codes 99358 and 99359 and the CCM codes 
(CPT 99487, 99489, 99490) or our finalized BHI service codes (G0502, 
G0503, G0504, G0507 discussed below). The work of the billing 
practitioner in the provision of non-complex CCM and the BHI services 
is related to the direction of ongoing care management and coordination 
activities of other individuals, compared to the work of 99358 and 
99359 which is described as personally performed and directly related 
to a face-to-face service. On that basis, we do not believe that there 
is significant overlap in the description of services or the valuation.
    The potential intersection of CPT codes 99358 and 99359 with the 
complex CCM codes is harder to assess because complex CCM explicitly 
includes medical decision-making of moderate to high complexity by the 
billing practitioner, which is not performed by clinical staff. The 
complex CCM codes, however, only measure or count the time of clinical 
staff. Similarly, TCM includes moderate to high complexity medical 
decision-making during the service period as well as a level 4 or 5 
face-to-face visit, even though clinical staff may perform a number of 
other aspects of the service. For CY 2017, for administrative 
simplicity, we are adopting the CPT provision (and finalizing as 
proposed) that complex CCM cannot be reported during the same month as 
non-face-to-face prolonged services, CPT codes 99358 and 99359 (by a 
single practitioner). Similarly, we are adopting the CPT provision that 
non-face-to-face prolonged services, CPT codes 99358 and 99359 may not 
be reported when performed during the service time of TCM (CPT codes 
99495 and 99496) (by a single practitioner). We interpret the CPT 
provision to mean that CPT codes 99358 and 99359 cannot be reported 
during the TCM 30-day service period, by the same practitioner who is 
reporting the TCM.
    Regarding potential intersection of CPT codes 99358 and 99359 with 
proposed G0505 (Cognition and functional assessment by the physician or 
other qualified health care professional in office or other 
outpatient), we are finalizing our proposal that G0505 be designated as 
a

[[Page 80230]]

companion or ``base'' E/M code to non-face-to-face prolonged services 
(CPT codes 99358 and 99359) (see section II.E.5 for a detailed 
discussion of G0505). That is, for CY 2017 CPT codes 99358 and 99359 
may be reported with G0505 as the associated companion code, whether 
furnished on the same day or a different day. We believe CPT intended 
the code on which G0505 is modeled to function like a specific E/M 
service, and that while the specificity of the service explicitly 
includes care planning unique to the needs of patients with particular 
conditions, there may well be circumstances where the pre- or post-time 
for a particular beneficiary may be prolonged. In their current form, 
the non-face-to-face prolonged service codes exist for the purpose of 
providing additional payment to account for the biller's additional 
time related to E/M visits. Therefore, we believe the non-face-to-face 
prolonged service codes should be reportable when related to E/M 
services, including those such as G0505 that describe more specific E/M 
work. We look forward to continued feedback on this issue, including 
through potential revisions to CPT guidance.
    Regarding intersection of CPT codes 99358 and 99359 with G0506, we 
note that G0506 is already an add-on code to another E/M service (the 
CCM initiating visit, which can be the AWV/IPPE or a qualifying face-
to-face E/M visit). We are providing in section II.E.4.a that at this 
time (beginning in CY 2017), G0506 will be a code that is only billable 
one time, at the outset of CCM services. We agree with commenters that 
it would be unusual for physicians to spend enough time with a given 
beneficiary on a given day to warrant reporting all three codes (the 
initiating visit code, G0506, and a prolonged service code). We also 
believe that a simpler approach is preferable at this time (two related 
codes for CCM initiation, instead of possibly three). Therefore our 
final policy for CY 2017 is that prolonged services (whether face-to-
face or non-face-to-face) cannot be reported in addition to G0506 in 
association with a companion E/M code that also qualifies as the CCM 
initiating visit. In association with the CCM initiating visit, a 
billing practitioner may choose to report either prolonged services or 
G0506 (if requirements to bill both prolonged services and G0506 are 
met), but cannot report both a prolonged service code and G0506.
3. Establishing Separate Payment for Behavioral Health Integration 
(BHI)
    In the CY 2016 PFS final rule with comment period (80 FR 70920), we 
stated that we believe the care and management for Medicare 
beneficiaries with behavioral health conditions often requires 
extensive discussion, information-sharing and planning between a 
primary care physician and a specialist. In CY 2016 rulemaking, we 
described that in recent years, many randomized controlled trials have 
established an evidence base for an approach to caring for patients 
with behavioral health conditions called the psychiatric Collaborative 
Care Model (CoCM). We sought information to assist us in considering 
refinements to coding and payment to address this model in particular. 
The psychiatric CoCM is one of many models for behavioral health 
integration or BHI, a term that refers broadly to collaborative care 
that integrates behavioral health services principally with primary 
care, but that may also integrate behavioral health care with inpatient 
and other clinical care. BHI is a team-based approach to care that 
focuses on integrative treatment of patients with medical and mental or 
behavioral health conditions. In the CY 2017 proposed rule (81 FR 46203 
through 46205), we proposed four new G-codes for BHI services: Three 
describing the psychiatric CoCM specifically, and one generally 
describing related models of care.
a. Psychiatric Collaborative Care Model (CoCM)
    A specific model for BHI, psychiatric CoCM typically is provided by 
a primary care team consisting of a primary care provider and a care 
manager who works in collaboration with a psychiatric consultant, such 
as a psychiatrist. Care is directed by the primary care team and 
includes structured care management with regular assessments of 
clinical status using validated tools and modification of treatment as 
appropriate. The psychiatric consultant provides regular consultations 
to the primary care team to review the clinical status and care of 
patients and to make recommendations. As we previously noted, several 
resources have been published that describe the psychiatric CoCM in 
greater detail and assess the impact of the model, including pieces 
from the University of Washington (http://aims.uw.edu/), the Institute 
for Clinical and Economic Review (http://icer-review.org/announcements/icer-report-presents-evidence-based-guidance-to-support-integration-of-behavioral-health-into-primary-care/), and the Cochrane Collaboration 
(http://www.cochrane.org/CD006525/DEPRESSN_collaborative-care-forpeople-with-depression-and-anxiety). Because this particular kind of 
collaborative care model has been tested and documented in medical 
literature, in the CY 2016 proposed rule we expressed particular 
interest in how coding used to describe PFS services might facilitate 
appropriate valuation of the services furnished under this model. We 
solicited public comments to assist us in considering refinements to 
coding and payment to address this model in particular relative to 
current coding and payment policies, as well as information related to 
various requirements and aspects of these services.
    After consideration of the comments, we proposed in the CY 2017 PFS 
proposed rule to begin making separate payment for services furnished 
using the psychiatric CoCM, beginning January 1, 2017. We were aware 
that the CPT Editorial Panel, recognizing the need for new coding for 
services under this model of care, had approved three codes to describe 
the psychiatric collaborative care that is consistent with this model, 
but the codes would not be ready in time for valuation in CY 2017. 
Current CPT coding does not accurately describe or facilitate 
appropriate payment for the treatment of Medicare beneficiaries under 
this model of care. For example, under current Medicare payment policy, 
there is no payment made specifically for regular monitoring of 
patients using validated clinical rating scales or for regular 
psychiatric caseload review and consultation that does not involve 
face-to-face contact with the patient. We believed that these resources 
are directly involved in furnishing ongoing care management services to 
specific patients with specific needs, but they are not appropriately 
recognized under current coding and payment mechanisms. Because PFS 
valuation is based on the relative resource costs of the PFS services 
furnished to Medicare beneficiaries, we believed that appropriate 
coding for these services for CY 2017 will facilitate accurate payment 
for these and other PFS services. Therefore, we proposed separate 
payment for services under the psychiatric CoCM using three new G-
codes, as detailed below: G0502, G0503, and G0504, which would parallel 
the CPT codes that are being created to report these services.
    The proposed code descriptors were as follows (from Current 
Procedural Terminology (CPT[supreg]) Copyright 2016 American Medical 
Association (and we understand from CPT that they will be effective as 
part of CPT codes January 1, 2018). All rights reserved):
     G0502: Initial psychiatric collaborative care management, 
first 70 minutes in the first calendar month of

[[Page 80231]]

behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional, with the following required 
elements:
    ++ Outreach to and engagement in treatment of a patient directed by 
the treating physician or other qualified health care professional;
    ++ Initial assessment of the patient, including administration of 
validated rating scales, with the development of an individualized 
treatment plan;
    ++ Review by the psychiatric consultant with modifications of the 
plan if recommended;
    ++ Entering patient in a registry and tracking patient follow-up 
and progress using the registry, with appropriate documentation, and 
participation in weekly caseload consultation with the psychiatric 
consultant; and
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies.
     G0503: Subsequent psychiatric collaborative care 
management, first 60 minutes in a subsequent month of behavioral health 
care manager activities, in consultation with a psychiatric consultant, 
and directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Tracking patient follow-up and progress using the registry, with 
appropriate documentation;
    ++ Participation in weekly caseload consultation with the 
psychiatric consultant;
    ++ Ongoing collaboration with and coordination of the patient's 
mental health care with the treating physician or other qualified 
health care professional and any other treating mental health 
providers;
    ++ Additional review of progress and recommendations for changes in 
treatment, as indicated, including medications, based on 
recommendations provided by the psychiatric consultant;
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies;
    ++ Monitoring of patient outcomes using validated rating scales; 
and relapse prevention planning with patients as they achieve remission 
of symptoms and/or other treatment goals and are prepared for discharge 
from active treatment.
     G0504: Initial or subsequent psychiatric collaborative 
care management, each additional 30 minutes in a calendar month of 
behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional (List separately in addition to code 
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
    We stated that we intend these to be temporary codes and would 
consider whether to adopt and establish values for the associated new 
CPT codes under our standard process once those codes are active.
    We proposed that these services would be furnished under the 
direction of a treating physician or other qualified health care 
professional during a calendar month. These services would be furnished 
when a patient has a diagnosed psychiatric disorder that requires a 
behavioral health care assessment; establishing, implementing, 
revising, or monitoring a care plan; and provision of brief 
interventions. The diagnosis could be either pre-existing or made by 
the billing practitioner. These services would be reported by the 
treating physician or other qualified health care professional and 
include the services of the treating physician or other qualified 
health care professional, the behavioral health care manager (see 
description below) who would furnish services incident to services of 
the treating physician or other qualified health care professional, and 
the psychiatric consultant (see description below) whose consultative 
services would be furnished incident to services of the treating 
physician or other qualified health care professional. We proposed that 
beneficiaries who are appropriate candidates for care reported using 
the psychiatric CoCM codes could have newly diagnosed conditions, need 
help in engaging in treatment, have not responded to standard care 
delivered in a non-psychiatric setting, or require further assessment 
and engagement prior to consideration of referral to a psychiatric care 
setting. Beneficiaries would be treated for an episode of care, defined 
as beginning when the behavioral health care manager engages in care of 
the beneficiary under the appropriate supervision of the billing 
practitioner and ending with:
     The attainment of targeted treatment goals, which 
typically results in the discontinuation of care management services 
and continuation of usual follow-up with the treating physician or 
other qualified healthcare professional; or
     Failure to attain targeted treatment goals culminating in 
referral to a psychiatric care provider for ongoing treatment; or
     Lack of continued engagement with no psychiatric 
collaborative care management services provided over a consecutive 6-
month calendar period (break in episode).

A new episode of care would start after a break in episode of 6 
calendar months or more.
    The treating physician or other qualified health care professional 
would direct the behavioral health care manager and continue to oversee 
the beneficiary's care, including prescribing medications, providing 
treatments for medical conditions, and making referrals to specialty 
care when needed. Medically necessary E/M and other services could be 
reported separately by the treating physician or other qualified health 
care professional, or other physicians or practitioners, during the 
same calendar month. Time spent by the treating physician or other 
qualified health care professional on activities for services reported 
separately could not be included in the services reported using G0502, 
G0503, and G0504. We proposed that the behavioral health care manager 
would be a member of the treating physician or other qualified health 
care professional's clinical staff with formal education or specialized 
training in behavioral health (which could include a range of 
disciplines, for example, social work, nursing, and psychology) who 
provides care management services, as well as an assessment of needs, 
including the administration of validated rating scales,\5\ the 
development of a care plan, provision of brief interventions, ongoing 
collaboration with the treating physician or other qualified health 
care professional, maintenance of a registry,\6\ all in consultation 
with a psychiatric consultant. The behavioral health care manager would 
furnish these services both face-to-face and non-face-to-face, and 
consult with the psychiatric consultant minimally on a weekly basis. We 
proposed that the behavioral health care manager would be on-site at 
the location where the treating physician or other qualified health 
care professional furnishes services to the beneficiary.
---------------------------------------------------------------------------

    \5\ For example, see https://aims.uw.edu/resource-library/measurement-based-treatment-target.
    \6\ For example, see https://aims.uw.edu/collaborative-care/implementation-guide/plan-clinical-practice-change/identify-population-based.
---------------------------------------------------------------------------

    We proposed that the behavioral health care manager may or may not 
be a professional who meets all the requirements to independently 
furnish and report services to Medicare. If otherwise eligible, then 
that individual

[[Page 80232]]

could report separate services furnished to a beneficiary receiving the 
services described by G0502, G0503, G0504, and G0507 in the same 
calendar month. These could include: Psychiatric evaluation (90791, 
90792), psychotherapy (90832, 90833, 90834, 90836, 90837, 90838), 
psychotherapy for crisis (90839, 90840), family psychotherapy (90846, 
90847), multiple family group psychotherapy (90849), group 
psychotherapy (90853), smoking and tobacco use cessation counseling 
(99406, 90407), and alcohol or substance abuse intervention services 
(G0396, G0397). Time spent by the behavioral health care manager on 
activities for services reported separately could not be included in 
the services reported using time applied to G0502, G0503, and G0504.
    The psychiatric consultant involved in the ``incident to'' care 
furnished under this model would be a medical professional trained in 
psychiatry and qualified to prescribe the full range of medications. 
The psychiatric consultant would advise and make recommendations, as 
needed, for psychiatric and other medical care, including psychiatric 
and other medical diagnoses, treatment strategies including appropriate 
therapies, medication management, medical management of complications 
associated with treatment of psychiatric disorders, and referral for 
specialty services, that are communicated to the treating physician or 
other qualified health care professional, typically through the 
behavioral health care manager. The psychiatric consultant would not 
typically see the patient or prescribe medications, except in rare 
circumstances, but could and should facilitate a referral to a 
psychiatric care provider when clinically indicated.
    In the event that the psychiatric consultant furnished services to 
the beneficiary directly in the calendar month described by other 
codes, such as E/M services or psychiatric evaluation (CPT codes 90791 
and 90792), those services could be reported separately by the 
psychiatric consultant. Time spent by the psychiatric consultant on 
activities for services reported separately could not be included in 
the services reported using G0502, G0503, and G0504.
    We also noted that, although the psychiatric CoCM has been studied 
extensively in the setting of specific behavioral health conditions 
(for example, depression), we received persuasive comments in response 
to the CY 2016 proposed rule recommending that we not specify 
particular diagnoses required for use of the codes for several reasons, 
including that: There may be overlap in behavioral health conditions; 
there are concerns that there could be modification of diagnoses to fit 
within payment rules which could skew the accuracy of submitted 
diagnosis code data; and for many patients for whom specialty care is 
not available, or who choose for other reasons to remain in primary 
care, primary care treatment will be more effective if it is provided 
within a model of integrated care that includes care management and 
psychiatric consultation.
    Comment: The public comments were very supportive of our creation 
of the three G-codes for CY 2017 to pay for services furnished using 
the psychiatric CoCM. The commenters offered a number of 
recommendations regarding valuation of the codes. Some commenters 
requested additional codes, sought clarification, or presented 
statements in favor of including the services of practitioners other 
than psychiatrists, especially psychologists and social workers, within 
the proposed codes.
    Response: We thank the commenters for their support of coding and 
valuation for services furnished using the psychiatric CoCM, and for 
their recommendations regarding appropriate valuation. We address the 
comments on valuation in section II.L of this final rule. We address 
the comments regarding payment for services of psychologists and social 
workers below.
    Comment: Several commenters expressed concern that making separate 
payment for psychiatric CoCM for the treatment of mood disorders might 
result in neglecting treatment for other mental health conditions. 
Other commenters expressed support for not designating a limited set of 
eligible behavioral health diagnoses. One commenter stated that 
requiring a diagnosed behavioral health condition might mean that 
subclinical issues or undiagnosed behavioral health conditions would be 
neglected.
    Response: We continue to believe that we should not limit billing 
and payment for the psychiatric CoCM codes to a limited set of 
behavioral health conditions. As we understand it, the psychiatric CoCM 
model of care may be used to treat patients with any behavioral health 
condition that is being treated by the billing practitioner, including 
substance use disorders. In the Collaborative Care literature reviewed 
by the Cochrane Collaboration and others, there is stronger evidence of 
effectiveness and cost-effectiveness for certain behavioral disorders, 
particularly mood and anxiety disorders, than for others. However, we 
continue to receive persuasive comments indicating that the psychiatric 
CoCM is recommended for broader incorporation into clinical practice, 
and recommending that we not specify the use of the psychiatric CoCM 
codes for only particular behavioral health diagnoses. Therefore we are 
not limiting billing and payment for the psychiatric CoCM codes to a 
specified set of behavioral health conditions.
    In response to the public comment regarding whether we should 
require a diagnosed psychiatric disorder (as opposed to a subclinical 
or undiagnosed condition), we are clarifying that as described, the 
services require that there must be a presenting psychiatric or 
behavioral health condition(s) that, in the clinical judgment of the 
treating physician or other qualified health professional, warrants 
``referral'' to the behavioral health care manager for further 
assessment and treatment through provision of psychiatric CoCM 
services. ``Referral'' is placed in quotes because the behavioral 
health care manager may be located in the same practice as the treating 
physician or other qualified health professional, who in any event 
provides ongoing oversight and continues to treat the beneficiary. 
However, the referring diagnosis (or diagnoses) may be either pre-
existing or made by the treating physician or other qualified health 
professional, and we are not establishing any specific list of eligible 
or included diagnoses or conditions. The treating physician or other 
qualified health professional may not be qualified or able to fully 
diagnose all relevant psychiatric or behavioral health condition(s) 
prior to referring the beneficiary for psychiatric CoCM services. If in 
the course of providing psychiatric CoCM services, it becomes clear 
that the referring condition(s) or other diagnoses cannot be addressed 
by psychiatric CoCM services, then we understand that the beneficiary 
should be referred for other psychiatric treatment or should continue 
usual follow-up care with the treating practitioner, because the 
episode of psychiatric CoCM services ends if there is failure to attain 
targeted treatment goals after or despite changes in treatment, as 
indicated. Beneficiaries receiving care reported using the psychiatric 
CoCM codes may, but are not required to have comorbid chronic or other 
medical condition(s) that are being managed by the treating 
practitioner.
    Comment: Several commenters who supported payment for the proposed 
codes for psychiatric CoCM services in primary care settings, raised 
questions about whether these codes could be

[[Page 80233]]

used to bill for services furnished in other settings that are not 
traditional primary care settings, such as inpatient or long-term care, 
oncology practices, or emergency departments. Some of these commenters 
recommended additional new codes to pay for services furnished in these 
other settings.
    Response: The psychiatric CoCM trials and real world implementation 
have mainly included primary care practice that broadly includes 
pediatrics, obstetrics/gynecology, and geriatrics as well as family 
practice and general internal medicine. The psychiatric CoCM has also 
been used in cardiology and oncology practice, and we believe it could 
be used in various medical specialty settings, as long as the 
specialist physician or practitioner is managing the beneficiary's 
behavioral health condition(s) as well as other medical conditions (for 
example, cancer, status-post acute myocardial infarction and other 
conditions where co-morbid depression is common). Accordingly, we are 
not limiting the code to reporting by only ``traditional'' primary care 
specialties. We believe primary care practitioners will most frequently 
perform the services described by the new psychiatric CoCM codes, but 
if other specialist practitioners perform these services and meet all 
of the requirements to bill the code(s), then they may report the 
psychiatric CoCM codes. We are interested in receiving additional, more 
specific information from stakeholders regarding which specialties 
furnish psychiatric CoCM services. We note that we would generally not 
expect psychiatrists to bill the psychiatric CoCM codes, because 
psychiatric work is defined as a sub-component of the psychiatric CoCM 
codes.
    Regarding psychiatric CoCM services furnished to inpatients or 
beneficiaries in long-term care settings such as nursing or custodial 
care facilities, we note that the forthcoming CPT codes are not limited 
to office or other outpatient or domiciliary services. Moreover, our 
goal is to separately identify and pay for psychiatric CoCM services 
furnished to beneficiaries in any appropriate setting of care, whether 
inpatient or outpatient, in recognition of the associated time and 
service complexity. Care of beneficiaries who are admitted to a 
facility, are in long-term care, or are transitioning among settings 
during the month may be more complex than the care of other types of 
patients. While there is some overlap between psychiatric CoCM and CCM 
services, they are distinct services with differing patient 
populations, as discussed elsewhere in this section of our final rule. 
Therefore, we have valued the psychiatric CoCM services in both 
facility and non-facility settings (see section II.L on valuation). We 
are not limiting the time that can be counted towards the monthly time 
requirement to bill the psychiatric CoCM code(s) to time that is spent 
in the care of an outpatient or a beneficiary residing in the 
community. However, we also stress that G0502, G0503 and G0504 can only 
be reported by a treating physician or other qualified health care 
professional when he or she has directed the psychiatric CoCM service 
for the duration of time that he or she is reporting it, and has a 
qualifying relationship with individuals providing the service under 
his or her direction and control. Also, time and effort that is spent 
managing care transitions for CCM or TCM patients and that is counted 
towards reporting TCM or CCM services, cannot also be counted towards 
reporting any transitional care management activities reported under a 
BHI service code(s), either the psychiatric CoCM codes or the code 
describing other BHI services. We welcome additional input from 
stakeholders regarding appropriate (or inappropriate) sites of service 
for G0502, G0503 and G0504.
    We note that for CY 2017, the facility PE RVU for psychiatric CoCM 
services will include the indirect PE allocated based on the work RVUs, 
but no direct PE (which is explicitly comprised of other labor, 
equipment and supplies). This is because historically, the PFS facility 
rate for a given professional service assumes that the billing 
practitioner is not bearing a significant resource cost in labor by 
other individuals, equipment or supplies. We generally assume that 
those costs are instead borne by the facility, and are adequately 
accounted for in a separate payment made to the facility to account for 
these costs and other costs incurred by the facility for the 
beneficiary's facility stay. For BHI services and similar care 
management services such as CCM, we have been considering whether this 
approach to PFS valuation is optimal because the PFS service, in 
significant part, may be provided by the behavioral health care 
manager, clinical staff, or even other physicians under the employment 
of the billing practitioner or under contract to the billing 
practitioner. These individuals may provide much of the PFS service 
remotely, and are not necessarily employees or staff of the facility. 
Indeed, the BHI services are defined in terms of activities performed 
by individual(s) other than the billing practitioner and who may not be 
affiliated with or located within the facility, even though as we 
discuss below the billing practitioner must also perform certain work. 
For this type of PFS service, there may be more direct practice expense 
borne by the billing practitioner even though the beneficiary is 
located, for part or all of the month, in a facility receiving 
institutional payment. We plan to consider these issues further in the 
future.
    Comment: One specialty association supported the proposed 
psychiatric CoCM codes, noting that although few of their members would 
use these codes, they set an important precedent to recognize 
interdisciplinary care that requires significant non-face-to-face work. 
This commenter anticipated that similar code series may be developed in 
the future to describe complex management in other specialties 
including neurology, and supported the adoption of language approved at 
CPT that carefully defined the roles of multiple professionals. Other 
commenters similarly expressed support for separate payment for 
additional collaborative care services, including inter-professional 
consultation in the treatment of other illnesses such as cancer or 
multiple sclerosis.
    Response: We continue to be interested in new coding that describes 
integrative, collaborative or consultative care among specialties other 
than primary care and behavioral health/psychiatry. We are especially 
interested in new coding that describes such care in sufficient detail 
that distinguishes it from existing service codes, and that would 
further the appropriate valuation of cognitive services. We will 
continue to follow any new coding proposals at CPT relevant for the 
Medicare population. We note that we have followed CPT's lead in 
finalizing proposed code G0505 for cognitive impairment assessment and 
care planning (see section II.E.5) as well as for psychiatric CoCM 
services. BHI is a unique type of service that we believe until now has 
not been well identified nor appropriately valued under existing codes. 
BHI is not comprised of mere consultation among professionals and has a 
unique evidence base, in addition to being recently addressed by 
forthcoming CPT coding. In addition, given the shortage of available 
psychiatric and other mental health professionals in many parts of the 
country, we believe it is important to identify and make accurate 
payment for models of care that facilitate access to psychiatric and 
other behavioral health specialty care through innovations in medical 
practice, like the ones described by these codes.

[[Page 80234]]

    Comment: One commenter asked CMS to clarify inclusion of nurse 
practitioners who are primary care practitioners and, in the specialty 
of psychiatry, psychiatric nurse practitioners who can perform 
psychiatric evaluations and treat psychiatric problems.
    Response: Nurse practitioners are authorized to independently bill 
Medicare for their services, and can also bill Medicare for services 
furnished incident to their services. Therefore, nurse practitioners 
who furnish the psychiatric CoCM services as described may bill for the 
psychiatric CoCM codes. Nurse practitioners who meet our final 
qualifications to serve as the behavioral health care manager may 
provide the behavioral health care manager services incident to the 
services of another (billing) practitioner. Nurse practitioners who 
meet all of our final requirements to serve as the psychiatric 
consultant may provide the psychiatric consultant services incident to 
the services of the billing practitioner.
    Comment: Regarding the care planning requirements for psychiatric 
CoCM services, some commenters noted that there is not necessarily 
value in accumulating or enumerating a number of different types of 
care plans addressing different aspects of the beneficiary's problems, 
such as a behavioral or psychiatric care plan, a CCM care plan, and a 
cognitive impairment care plan (see G0505 in section II.E.5).
    Response: While the proposed descriptors for the psychiatric CoCM 
services referred to an ``individualized treatment plan,'' not a ``care 
plan,'' we proposed in addition that the behavioral health care manager 
would ``develop a care plan.'' While any care planning should take into 
account the whole patient, our intent is that the care planning 
included in the CCM coding (and G0506, the CCM initiating visit add-on 
code) will be the most comprehensive in nature, addressing all health 
issues with particular focus on the multiple chronic conditions being 
managed by the billing practitioner. In that sense, the CCM care plan 
is an integrative care plan incorporating more comprehensive health 
information on all of the beneficiary's health issues, or reconciling 
care plans of other practitioners. In contrast, the BHI care planning 
will focus on behavioral health or psychiatric issues, in particular, 
just as cognitive impairment care planning will focus on cognitive 
impairment issues, in particular (see section II.E.5). We are not 
requiring the psychiatric CoCM treating practitioner or behavioral 
health consultant to perform care planning that incorporates 
comprehensive health information on all of the beneficiary's health 
issues or reconciles the care plans of other practitioners, as would be 
expected for CCM care planning.
    We understand that adoption of EHRs may be lower among behavioral 
health practitioners \7\ and note that resources are available to help 
inform how care plans can support team-based care and BHI.\8\ Our 
understanding from the public comments last year and subsequent 
discussions with experts on the psychiatric CoCM model of care, is that 
no specific electronic technology or format is necessary or 
indispensable to carry out the psychiatric CoCM model of care, or 
perform the services included in the codes we are creating to describe 
the services furnished using that model. We believe the format of the 
behavioral health care plan (or any care plan) is less important than 
having a process whereby feedback and expertise from all relevant 
practitioners and providers, whether internal or external to the 
billing practice, are integrated into the beneficiary's treatment plan 
and goals; that this plan be regularly assessed and revisited by the 
practitioner who is assuming an overall care management role for the 
beneficiary in a given month; that the patient is engaged in the care 
planning process; and that the care planning be documented in the 
medical record (as with any required element of any PFS service). We 
are revising the requirement for care planning by the behavioral health 
care manager accordingly, that he or she will perform ``behavioral 
health care planning in relation to behavioral/psychiatric health 
problems, including revision for patients who are not progressing or 
whose status changes.''
---------------------------------------------------------------------------

    \7\ See for instance http://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php and https://www.thenationalcouncil.org/wp-content/uploads/2012/10/HIT-Survey-Full-Report.pdf.
    \8\ For instance, AHRQ has a variety of resources on how shared 
care plans can support team-based care and behavioral health 
integration at https://integrationacademy.ahrq.gov/playbook/develop-shared-care-plan.
---------------------------------------------------------------------------

    Comment: A number of commenters recommended that we should not 
require the behavioral health care manager for the psychiatric CoCM 
services to be located on site within the primary care practice. The 
commenters noted that in some settings, particularly rural areas or 
smaller practices, this may be especially important. Some commenters 
assumed that there is also a behavioral health care manager for G0507 
(discussed below). These commenters compared BHI services (the 
psychiatric CoCM services and G0507) to CCM and recommended that CMS 
adopt the same requirements for all the BHI codes as for CCM, regarding 
supervision, location of a behavioral health care manager, and third 
party outsourcing.
    Response: For the psychiatric CoCM services, we proposed that the 
behavioral health care manager would be a member of the treating 
physician or other qualified health care professional's clinical staff, 
and would be required to be located on site but able to work under 
general supervision. In addition, we proposed that the behavioral 
health care manager provides his or her services both face-to-face and 
non-face-to-face. We believed that services provided using the 
psychiatric CoCM model of care commonly involve face-to-face 
interaction between the behavioral health care manager and the 
beneficiary on appropriate occasions, such as the outset of services (a 
``warm hand-off'' from the treating physician or other qualified health 
care professional). In addition, whether face-to-face or non-face-to-
face, many of the included behavioral health care manager duties could 
be performed while the treating practitioner is not in the office and 
could be performed after hours. We note that the behavioral health care 
manager duties are listed in full above, and include care management 
services, as well as an assessment of needs, including the 
administration of validated rating scales, behavioral health care 
planning, provision of brief interventions, ongoing collaboration with 
the treating physician or other qualified health care professional, and 
maintenance of a registry, all in consultation with a psychiatric 
consultant.
    The delivery of the psychiatric CoCM depends, in part, on 
continuity of care between a given patient and the assigned behavioral 
health care manager. Also it requires collaboration, integration and 
ongoing data flow between the behavioral health care manager and the 
treating practitioner the behavioral health care manager is supporting, 
as well as with the psychiatric consultant who is usually remotely 
located under the psychiatric CoCM model of care. As previously 
discussed, the psychiatric CoCM is an integrative model of care, and in 
considering our proposal we were concerned that allowing the behavioral 
health care manager to be located remotely would compromise their 
ability to collaborate, communicate, and timely treat and share 
information with the beneficiary and the rest of the care team. We are 
aware of many care

[[Page 80235]]

management companies and health information technology companies that 
may seek to provide remote care management and related services under 
all of the new BHI codes, as they have for CCM and similar services 
recently adopted under the PFS. We received public comments from 
several such stakeholders that indicated an interest in the provision 
of BHI services and related health information technology. We 
understand that there have been successful implementations (positive 
randomized controlled trials) of the psychiatric CoCM using remote call 
centers; however, in these implementations, call center staff were not 
randomly rotated among patients and there was ongoing data flow and 
connectivity between the behavioral health care manager and the other 
members of the care team, as well as the patient. Moreover, the 
behavioral health care manager would presumably have to be on site at 
least some of the time (even if under general supervision), in order to 
provide some of their services in-person with the beneficiary.
    The fact that we proposed and are finalizing general supervision 
for the psychiatric CoCM codes as we did for CCM services (see section 
II.E.3.b) does not mean that general supervision alone suffices to meet 
the requirements of the psychiatric CoCM for continuity, collaboration 
and integration among the care team members, including the beneficiary. 
General supervision means that the service is furnished under the 
overall direction and control of the practitioner billing the service, 
but without the presence of the practitioner being required during the 
performance of the service. This definition does not directly govern 
where individual(s) providing the service on an incident to basis are 
located, whether on site or remote. Rather, it governs the location and 
informs the involvement of the billing practitioner.
    For payment purposes, we are assigning general supervision to the 
psychiatric CoCM codes because we do not believe it is clinically 
necessary that the professionals on the team who provide services other 
than the treating practitioner (namely, the behavioral health care 
manager and the psychiatric consultant) must have the billing 
practitioner immediately available to them at all times, as would be 
required under a higher level of supervision. However, general 
supervision sets the minimum standard for supervision and does not, by 
itself, meet the requirements we are setting for billing new codes 
G0502, G0503 and G0504. While certain aspects of psychiatric CoCM 
services might be furnished under general supervision, we do not 
believe the general supervision requirement adequately describes the 
nature of the relationship and interactions of the respective team 
members for services furnished using the psychiatric CoCM or the codes 
we are creating to describe those services. Moreover it only directly 
addresses the physical location of the billing practitioner, not the 
behavioral health care manager, necessarily.
    After considering the public comments, we are not finalizing our 
proposal that the behavioral health care manager must be a member of 
the treating physician or other qualified health care professional's 
clinical staff. As some of the psychiatric CoCM services can be 
contracted out to a third party (subject to rules discussed below), the 
contracted individuals are not necessarily employees of the treating 
practitioner.
    Regarding the face-to-face provision of services by the behavioral 
health care manager, we are requiring that the behavioral health care 
manager must be available to provide services on a face-to-face basis, 
but not that face-to-face services must be provided. We are not 
finalizing the proposed requirement that the behavioral health care 
manager must be located on site, in order to allow for after-hours or 
appropriate remote provision of services. However, to ensure clinical 
integration with the treating practitioner and familiarity and 
continuity with the beneficiary, which are characteristic of services 
furnished under the psychiatric CoCM model of care, we are requiring 
that the behavioral health care manager must have a collaborative, 
integrated relationship with the rest of the care team members, and be 
able to perform all of the required elements of the psychiatric CoCM 
services delineated for the behavioral health care manager. The 
behavioral health care manager must have the ability to engage the 
beneficiary outside of regular clinic hours as necessary to perform 
their duties under the CoCM model, and have a continuous relationship 
with the beneficiary. This does not mean the behavioral health care 
manager is necessarily an employee of or always physically located 
within the practice, nor does it require provision of behavioral health 
care manager services to the beneficiary on site. The behavioral health 
care manager may provide his or her services from a remote location 
that is remote from the billing practitioner or remote from the 
beneficiary, subject to incident to rules and regulations in 42 CFR 
410.26, if he or she has a qualifying relationship with the rest of the 
care team including the beneficiary, and is available to provide 
services face-to-face.
    We will monitor this issue going forward, not just for the 
psychiatric CoCM but also for the general BHI service code (G0507) we 
are finalizing, as well as for TCM and CCM services. As we discuss in 
the final rule section on CCM below, we are continuing to consider 
whether outsourcing certain aspects of these services to a third party 
fragments care, leads to insufficient involvement and oversight of the 
billing practitioner or results in services that do not actually 
represent or facilitate continuous, seamless transitional care and 
other required aspects of these services. We will continue to consider 
how to best define the continuity of care that is required for services 
furnished and billed under all of these codes, and whether arrangements 
for remote provision of services whether by a case management company 
or another entity increases rather than reduces service fragmentation. 
Advances in health information technology provide opportunities for 
remote connectivity and interoperability that may assist and be useful, 
if not necessary, for reducing care fragmentation. However, remote 
provision of services by entities having only a loose association with 
the treating practitioner can detract from continuous, patient-centered 
care, whether or not those entities employ certified or other 
electronic technology.
    We note that while time spent by the treating practitioner is not 
explicitly counted for in codes G0502, G0503 and G0504, these codes are 
valued to include work performed directly by the treating practitioner. 
The treating practitioner directs the behavioral health care manager 
and continues to oversee the patient's care, including prescribing 
medications, providing treatments for medical conditions, and making 
referrals to specialty care when needed. We are finalizing as proposed 
that some of these services may be separately billable. However, we 
wish to emphasize that the treating practitioner must remain involved 
in ongoing oversight, management, collaboration and reassessment as 
appropriate to bill the psychiatric CoCM codes.
    Comment: We received a number of comments requesting that we allow 
or recognize pharmacists, especially neurologic or psychiatric 
pharmacists, or doctoral-level clinical psychologists to serve as the 
psychiatric consultant. Some commenters were concerned that CMS is 
advocating pharmacotherapy over psychotherapy by requiring a 
psychiatric consultant who can prescribe medication.

[[Page 80236]]

    Response: We agree with the commenters that there are multiple 
types of indicated treatment for behavioral health conditions, 
including psychotherapy and other psychosocial interventions as well as 
pharmacotherapy that are available and should be offered to 
beneficiaries receiving psychiatric CoCM services. Our intent is not to 
inappropriately steer beneficiaries into medication-based treatment, 
but rather that the psychiatric consultant be able to present and 
recommend the full range of treatment options including but not limited 
to medications, and to advise regarding any medications the beneficiary 
chooses to take. Under the psychiatric CoCM, the psychiatric consultant 
must be able to prescribe medication. As we discuss in section II.L on 
valuation of G0502, G0503 and G0504, we agree with the commenters who 
stated that the role of the psychiatric consultant under these codes is 
primarily evaluation and management, which is not within the scope of 
pharmacists or clinical psychologists under Medicare rules. Therefore, 
we are finalizing the role and qualifications of the psychiatric 
consultant as proposed. The general BHI code (G0507), which we are 
finalizing, was intended and may be used to report other models of 
care, where the beneficiary may not receive E/M services from the 
consultant and the consultant may only be authorized to provide 
psychotherapy or consultation regarding medications (see section 
II.E.3.b).
    Comment: We received a number of comments recommending various 
types of professionals as qualified to serve as the behavioral health 
care manager, such as licensed clinical social workers (LCSWs) and 
psychologists.
    Response: Unlike CCM and the general BHI service (code G0507), the 
psychiatric CoCM codes are used to report time that is spent in 
specified activities performed by a behavioral health care manager 
having formal education or specialized training in those activities, 
whether or not the behavioral health care manager is eligible to 
directly bill Medicare for other services. The behavioral health care 
manager may or may not be a professional who meets all the requirements 
to independently furnish and report services to Medicare. The 
behavioral health care manager must also meet any applicable licensure 
and state law requirements, which is required under 42 CFR 410.26 for 
all services provided under the PFS. LCSWs would meet these 
requirements, as would qualified registered nurses, clinical 
psychologists and other qualified clinical staff. Time spent by 
administrative or clerical staff cannot be counted towards the time 
required to bill G0502, G0503 or G0504.
    Evaluation and management services (such as face-to-face E/M 
visits) may be separately billed during the service period or on the 
same day as the psychiatric CoCM services, provided time is not counted 
twice towards the same code.
b. General Behavioral Health Integration (BHI)
    We recognize that the psychiatric CoCM is prescriptive and that 
much of its demonstrated success may be attributable to adherence to a 
set of elements and guidelines of care. We are finalizing the code set 
discussed above to pay accurately for care furnished using this 
specific model of care, given its widespread adoption and recognized 
effectiveness. However, we note that PFS coding, in general, does not 
dictate how physicians practice medicine and believe that it should, 
instead, reflect the practice of medicine. We also recognize that there 
are primary care practices that are incurring, or may incur, resource 
costs inherent to treatment of patients with similar conditions based 
on BHI models of care other than the psychiatric CoCM that may benefit 
beneficiaries with behavioral health conditions (see, for example, the 
approaches described at http://www.integration.samhsa.gov/integrated-care-models). There are a variety of care models ranging from 
behavioral health professionals embedded within a primary care office 
for same-day treatment, to remote consultation, to assessment-and-
referral (see, for example, http://www.commonwealthfund.org/publications/newsletters/quality-matters/2014/august-september/profiles; and http://www.integration.samhsa.gov/integrated-care-models). These models of care have tended to arise from clinical 
practice as opposed to the research environment (http://psychnews.psychiatryonline.org/doi/full/10.1176/appi.pn.2014.10b25), 
and include resource costs that differ in various respects from those 
associated with the psychiatric CoCM.
    To recognize the resource costs associated with furnishing such BHI 
services to Medicare beneficiaries, we also proposed to make payment 
using a new G-code that describes care management for beneficiaries 
with behavioral health conditions under other models of care. We 
believe that the resources associated with such care are not currently 
adequately recognized under the PFS. The proposed code was G0507 (Care 
management services for behavioral health conditions, at least 20 
minutes of clinical staff time, directed by a physician or other 
qualified health care professional, per calendar month). We noted that 
we would expect this code to be refined over time as we receive more 
information about other BHI models being used and how they are 
implemented.
    We sought stakeholder input on whether we should consider different 
increments of time for this code, such as a base code plus an add-on 
code comprised of additional 20 minute increments. We recognized that 
BHI services furnished under the proposed code may range in resource 
costs. We believed that appropriate payment for these services would 
further the refinement and implementation of BHI models of care, and 
that having utilization data would inform future refinement of the 
proposed code's valuation.
    Comment: The commenters were supportive of new coding to support 
payment for other BHI models of care. They believed G0507 could be used 
by some smaller or medium sized practices who could not conform to the 
strict parameters of the psychiatric CoCM but provide very similar 
services. They also stated that G0507 would be appropriate to report 
services furnished under other BHI models of care that may not require 
psychiatric services. We received a few comments describing particular 
models of care in great detail; a few commenters referenced the 
Veterans' Administration BHI care models, the Primary Care Behavioral 
Health/Behavioral Health Consultation (PCBH/BHC) Model, or general 
models in place within other health care systems. However, there was 
consensus among the commenters that another code(s) in addition to the 
psychiatric CoCM codes would be useful to collect information on how 
other behavioral health care models are being used and implemented.
    Many commenters recommended that CMS provide more of a framework or 
description of included services and provider types without being 
unduly burdensome. Some commenters recommended service elements similar 
to the CCM service elements (continuity of care with a designated 
member of the care team; a written care plan; a comprehensive 
assessment of behavioral health or psychiatric and other medical 
conditions as well as any functional and psychosocial needs, updated as 
necessary; routine evaluation of patient progress using a tracking 
system; services should be documented in the medical record and 
available to other treating professionals). These

[[Page 80237]]

commenters recommended that eligible patients should have a diagnosed 
psychiatric or substance use disorder that requires care management 
services. Several commenters recommended that BHI payments be tied to 
the use of behavioral health assessment tools for screening and 
collection of treatment outcomes throughout the sessions of care in 
primary care. These commenters believed this would better position 
behavioral health to benefit from the movement toward value-based 
payment in the future. Some commenters assumed there is a designated 
behavioral health care manager for the service described by G0507, and 
recommended that we adopt similar rules for this care manager as apply 
for clinical staff providing CCM services.
    Response: We continue to believe that another code, or set of BHI 
codes, in addition to the psychiatric CoCM code set would be useful to 
pay appropriately for BHI services furnished to Medicare beneficiaries. 
We also believe that such payment could facilitate our ability to 
identify and collect data regarding similar or related BHI service 
models. We agree with the commenters that we should provide more 
specificity around the services eligible for reporting under this other 
code(s). One way to do this would be to create codes with tiered times. 
Some commenters supported such an approach, while others believed it 
would be premature. At this time, we are not creating multiple levels 
of codes distinguishing levels of general BHI services using time or 
any other metric, but we may reconsider this in the future (also see 
section II.L on G0507 valuation).
    Regarding included elements of the general BHI service (G0507), we 
agree with the commenters that we should be more specific in our 
definition of this service. We wish to provide greater specificity 
without being overly prescriptive, since a range of activities may be 
included in BHI models of care other than the psychiatric CoCM. We 
believe we should include a core set of service elements that are 
similar to core elements of the psychiatric CoCM, especially a 
systematic process for initial assessment and routine follow up 
evaluation, revising the treatment approach or methods for patients who 
are not progressing or whose status changes; facilitating and 
coordinating behavioral health expertise and treatment; and designating 
a member of the care team with whom the beneficiary has a continuous 
relationship. We may revisit the included services in future years, but 
for CY 2017 the required service elements for the general BHI service 
(G0507) will be:
     Initial assessment or follow-up monitoring, including the 
use of applicable validated rating scales;
     Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are 
not progressing or whose status changes;
     Facilitating and coordinating treatment such as 
psychotherapy, pharmacotherapy, counseling and/or psychiatric 
consultation; and
     Continuity of care with a designated member of the care 
team.
    Accordingly, the final code descriptor will be, G0507: Care 
management services for behavioral health conditions, at least 20 
minutes of clinical staff time, directed by a physician or other 
qualified health care professional, per calendar month, with the 
following required elements:
     Initial assessment or follow-up monitoring, including the 
use of applicable validated rating scales;
     Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are 
not progressing or whose status changes;
     Facilitating and coordinating treatment such as 
psychotherapy, pharmacotherapy, counseling and/or psychiatric 
consultation; and
     Continuity of care with a designated member of the care 
team.
    We are aware of a number of validated rating scales that are 
available for use for a number of conditions addressed by BHI models of 
care, such as those described by the Kennedy Forum (see http://thekennedyforum-dot-org.s3.amazonaws.com/documents/MBC_supplement.pdf). 
We are requiring the use of such scales when applicable to the 
condition(s) that are being treated. Medication Assisted Treatment 
(MAT) may be a treatment that is facilitated under the facilitating 
treatment service element.
    Regarding diagnosis, we believe we should specify similar 
diagnostic criteria for G0507 and the psychiatric CoCM services (G0502, 
G0503 and G0504). Accordingly we are providing that beneficiaries who 
are appropriate candidates for services billed under G0507 will have an 
identified psychiatric or behavioral health condition(s) that requires 
a behavioral health care assessment, behavioral health care planning, 
and provision of interventions. Eligible beneficiaries must present 
with a condition(s) that in the treating practitioner's clinical 
judgment, warrants the services included in G0507. The presenting 
condition(s) may be pre-existing or newly diagnosed by the treating 
practitioner, and may be refined as treatment progresses. Beneficiaries 
receiving services reported under G0507 may, but are not required to 
have comorbid chronic or other medical condition(s) that are being 
managed by the treating practitioner. We are not limiting billing and 
payment for G0507 to a specified set of behavioral health conditions, 
because there may be overlap in behavioral health conditions; if we 
specified only certain diagnoses, practitioners might modify diagnoses 
to fit within payment rules; and for many beneficiaries for whom 
specialty care is not available, or who choose for other reasons to 
remain within primary care, their behavioral health condition(s) can be 
addressed using a model of integrated care.
    Regarding rules for clinical staff, we are clarifying that services 
included in the code G0507 may be provided directly by the treating 
practitioner or provided by other qualifying individuals (whom we term 
``clinical staff'') under his or her direction, during the calendar 
month service period. Unlike the psychiatric CoCM codes, for G0507 
there is not necessarily a specific individual designated as a 
``behavioral health care manager'' with formal or specialized education 
in providing the services (although there could be). Similarly, there 
is not necessarily a psychiatric or other behavioral health specialist 
consultant (although there could be), and we note that G0507 is not 
valued to explicitly account for such a consultant. We will apply the 
same definition of the term ``clinical staff'' that we have applied for 
CCM to G0507, namely, the CPT definition of this term, subject to the 
incident to rules and regulations and applicable state law, licensure 
and scope of practice at 42 CFR 410.26. For G0507, then, we note that 
the term ``clinical staff'' will encompass or include a psychiatric or 
other behavioral health specialist consultant, if the treating 
practitioner obtains consultative expertise. Clinical staff that 
provide included services do not have to be employed by the treating 
practitioner or located on site, necessarily, and may or may not be a 
professional who is permitted to independently furnish and report 
services to Medicare. Time spent by administrative or clerical staff 
cannot be counted towards the time required to bill G0507.
    G0507 is valued to include minimal work by the treating 
practitioner; the bulk of the valuation is based on clinical staff time 
(see section II.L on valuation). However, we want to emphasize that the

[[Page 80238]]

treating practitioner must direct the service, continue to oversee the 
beneficiary's care, and perform ongoing management, collaboration and 
reassessment. If the service (or part thereof) is provided incident to 
the treating practitioner's services, whether on site or remotely, the 
clinical staff providing services must have a collaborative, integrated 
relationship with the treating practitioner. They must also have a 
continuous relationship with the beneficiary.
    Evaluation and management services, such as face-to-face E/M 
visits, may be separately billed during the service period or on the 
same day as G0507, provided time is not counted twice towards the same 
code.
    For payment purposes, we are categorizing this service as a 
designated care management service assigned general supervision for 
purposes of ``incident to'' billing, because we do not believe it is 
clinically necessary for the individuals on the team who provide 
services other than the treating practitioner (namely, clinical staff) 
to have the treating practitioner immediately available to them at all 
times, as would be required under a higher level of supervision. 
However, general supervision sets the minimum standard for supervision 
and does not, by itself, meet the requirements we are setting for 
billing new code G0507. While certain aspects of G0507 might be 
furnished under general supervision, we do not believe the general 
supervision requirement adequately describes the nature of the 
relationship and interactions of the respective team members for 
services furnished using BHI models of care or the codes we are 
creating to describe those services. Moreover the general supervision 
requirement only directly addresses the physical location of the 
treating practitioner, not the location of clinical staff, necessarily.
    Comment: Regarding behavioral health care planning, some commenters 
noted that there is not necessarily value in accumulating or 
enumerating a number of different types of care plans addressing 
different aspects of the beneficiary's problems, such as a behavioral 
or psychiatric care plan, a CCM care plan, and a cognitive impairment 
care plan (see G0505 in section II.E.5).
    Response: While any care planning should take into account the 
whole patient, our intent is that the care planning included in the CCM 
coding (and G0506, the CCM initiating visit add-on code) will be the 
most comprehensive in nature, addressing all health issues with 
particular focus on the multiple chronic conditions being managed by 
the treating practitioner. In contrast, the BHI care planning will 
focus on behavioral health or psychiatric issues, in particular, just 
as the cognitive impairment care planning will focus on cognitive 
impairment issues, in particular (see section II.E.5. of this final 
rule).
    However, we understand that adoption of EHRs may be lower among 
behavioral health practitioners \9\ and note that resources are 
available to help inform how care plans can support team-based care and 
BHI.\10\ While we understand that practitioners, in general, are 
exploring a wide variety of innovative approaches and tools that 
facilitate care plan integration across clinical disciplines, at this 
time, there may not be sufficient adoption of interoperable health IT 
interoperability among all practitioners and providers treating a given 
beneficiary to necessarily have a single, master care plan that 
adequately addresses the progress of the beneficiary in relation to all 
of these issues. In general, practitioners are encouraged to pursue 
approaches that integrate health information from multiple sources into 
a single care plan, but we understand that practitioners may need to 
create separate documents or the relevant care planning may be 
documented in another format within the medical record.
---------------------------------------------------------------------------

    \9\ See for instance http://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php and https://www.thenationalcouncil.org/wp-content/uploads/2012/10/HIT-Survey-Full-Report.pdf.
    \10\ For instance, AHRQ has a variety of resources on how shared 
care plans can support team-based care and behavioral health 
integration at https://integrationacademy.ahrq.gov/playbook/develop-shared-care-plan.
---------------------------------------------------------------------------

    We believe the format of the care plan(s) is less important than 
having a process whereby feedback and expertise from all relevant 
practitioners and providers, whether internal or external to the 
billing practice, are integrated into the beneficiary's treatment plan 
and goals; that this plan be regularly assessed and revisited by the 
practitioner who is assuming an overall care management role for the 
beneficiary in a given month; that the patient is engaged in the care 
planning process; and that the care planning be documented in the 
medical record (as with any required element of any PFS service). We 
have framed the care planning service element for G0507 accordingly, 
``Behavioral health care planning in relation to behavioral/psychiatric 
health problems, including revision for patients who are not 
progressing or whose status changes.''
    Comment: We received a few comments recommending codes in addition 
to the psychiatric CoCM codes that would pay for similar services to 
inpatients, or for behavioral health services by psychologists to 
psychologically and medically complex patients in skilled nursing 
facilities (SNF) and nursing homes. Some of these commenters stated 
that in SNF and long-term care settings, psychologists work closely 
with primary care physicians, psychiatrists, nurses, and other 
consultants to improve outcomes by reducing inappropriate use or dosing 
of psychotropic medications, improving activities of daily living, and 
preventing avoidable admissions/falls. These commenters stated that 
many health systems employ psychologists as BHI team leaders or 
coordinators, and sought clarification on how psychologist-led teams 
would operationalize the new BHI codes. These commenters believe that 
psychology training provides unique skills in facilitating 
interdisciplinary teams. While they acknowledged that psychologists are 
not qualified to perform the full range of BHI services and 
interventions, they believed psychologists should be able to separately 
report and bill for care coordination and BHI initiation activities.
    We received similar comments supporting the addition of psychiatric 
collaborative care services to the PFS, and other evidence-based models 
in a variety of primary care-based treatment settings. However, these 
commenters supported the inclusion of social workers at all levels of 
licensures as reimbursable providers of these services.
    Response: We appreciate the commenters' descriptions of some 
particular working models of care, and we welcome additional 
information in this regard. We continue to believe it would be 
appropriate to have new coding for a range of BHI care models 
applicable to inpatient as well as outpatient and facility settings. 
Our goal in separately identifying and paying for BHI services is to 
prioritize accurate payment for these services, in recognition of the 
associated time and complexity of the services. We agree that 
beneficiaries who are admitted to a facility, are in long-term care, or 
are transitioning among settings during the month are likely to be more 
complex than other types of patients, and to warrant more- not less- 
BHI services. Therefore, we have valued G0507 in both facility and non-
facility settings (see section II.L on valuation). We are not limiting 
the time that can be counted towards the monthly time

[[Page 80239]]

requirement to bill G0507 to time that is spent in the care of an 
outpatient or a beneficiary residing in the community. As we provide 
for the psychiatric CoCM services, G0507 may be reported by specialties 
that are not ``traditional'' primary care specialties, if such 
specialists furnish the included services. However, we stress that 
G0507 can only be reported by a treating physician or other qualified 
health care professional when he or she has directed the BHI service 
for the duration of time that he or she is reporting it, and has a 
qualifying relationship with individuals providing the service under 
his or her direction and control. Also, time and effort that is spent 
managing care transitions for CCM or TCM patients and that is counted 
towards reporting TCM or CCM services, cannot also be counted towards 
reporting any transitional care management activities reported under a 
BHI service code(s). We welcome additional input from stakeholders 
regarding appropriate (or inappropriate) settings of service for G0507.
    Since the BHI initiating visit that is required to bill G0507 is 
not within the scope of practice of a psychologist or social worker 
(see below), psychologists and social workers will not be able to 
report G0507 directly (although a psychiatrist may be able to do so). 
Psychologists and social workers may provide care management services 
included in G0507 incident to the services of another (billing) 
practitioner. They may also provide services that are separately 
billable during the service period. We appreciate the commenters' 
support for team-based care, and we recognize the substantial role of 
various types of mental health professionals within a primary care 
team. We are interested in receiving additional input from stakeholders 
as to whether and why behavioral health care management services by a 
social worker, psychologist or similarly qualified professional should 
be reportable in its own right, rather than incident to the services of 
a practitioner authorized to bill Medicare for a BHI initiating visit. 
Consistent with our recent approaches to making proposals under PFS 
notice and comment rulemaking, we could consider adopting new coding 
under a different construct that was not defined as BHI, if 
stakeholders provided sufficient input on how to design, define and 
value the services. We would also consider such changes if adopted by 
the CPT Editorial Panel, per our usual process. BHI integrates 
behavioral health expertise into evaluation and management care. 
Therefore G0507 is designed to include services that require the 
oversight and involvement of a practitioner who can perform evaluation 
and management services, including facilitation of any needed 
pharmacotherapy, referral for specialty care, and overall management of 
the beneficiary's treatment in relation to primary care treatment. We 
note that G0507 would not be independently billed by psychologists or 
social workers, though from our understanding of various models of BHI, 
these professionals seem likely to be participants in team-based care 
for beneficiaries receiving these services.
c. BHI Initiating Visit
    Similar to CCM services (see section II.E.4), we proposed to 
require an initiating visit for all of the BHI codes (G0502, G0503, 
G0504 and G0507) that would be billable separate from the BHI services 
themselves. We proposed that the same services that can serve as the 
initiating visit for CCM services (see section II.E.4.a. of this final 
rule) could serve as the initiating visit for the proposed BHI codes. 
The initiating visit would establish the beneficiary's relationship 
with the billing practitioner (most aspects of the BHI services would 
be furnished incident to the billing practitioner's professional 
services), ensure the billing practitioner assesses the beneficiary 
prior to initiating care management processes, and provide an 
opportunity to obtain beneficiary consent (discussed below). We 
solicited public comment on the types of services that are appropriate 
for an initiating visit for the BHI codes, and within what timeframe 
the initiating visit should be conducted prior to furnishing BHI 
services.
    Comment: The commenters were largely supportive of our proposal to 
allow the same services to qualify for the initiating visit to CCM as 
for the initiating visit to BHI services. We received a few comments 
stating that in addition to the qualifying E/M services (or an AWV or 
IPPE), initiating services should include in-depth psychological 
evaluations delivered by a psychologist including CPT codes 90791, 
96116 or 96118 which, in turn, include care plan development. These 
commenters agreed that psychologists cannot personally furnish all BHI 
services (for example, medication reconciliation), but believe 
psychologists effectively coordinate care and perform other aspects of 
BHI services as part of a team under current practice models. They 
believe this approach would be particularly effective for reducing 
inappropriate use or dosing of psychotropic medications in elderly and 
complex patients, improving activities of daily living, and preventing 
avoidable admissions and falls.
    Response: We appreciate the commenters' feedback. We agree that 
psychologists would be qualified to perform care coordination that is 
included in the psychiatric CoCM codes (G0502, G0503 and G0504) and the 
general BHI code (G0507) under the direction of a physician or other 
qualified health care professional. In addition, beneficiaries 
receiving BHI services under any of those codes may be referred to 
psychologists for psychotherapy or other services that are separately 
billable and within the scope of practice of psychologists, as 
discussed elsewhere in this section of our final rule. However many 
commenters acknowledged, and we agree, that a BHI initiating visit is 
necessary. The initiating visit is not, in its entirety, within the 
scope of psychologist practice. Therefore, we are finalizing our 
proposal that the same services that qualify as the initiating visit 
for CCM will also qualify as initiating services for BHI, and they do 
not include in-depth psychological evaluation by a psychologist. Also, 
we will require an initiating visit for BHI only for new patients or 
beneficiaries not seen within a year of commencement of BHI services 
(the same requirement we are finalizing for CCM, see section II.E.4.a). 
As more experience is gained with the psychiatric CoCM services and 
other models of BHI care, we may reassess these provisions.
    As discussed above, we are interested in receiving input from 
stakeholders regarding circumstances other than BHI in which behavioral 
health care management services by a psychologist, social worker or 
similarly qualified professional should be reportable in its own right, 
rather than incident to the services of a practitioner authorized to 
bill Medicare for a BHI initiating visit.
    Comment: Some commenters recommended that CMS establish an add-on 
code to the initiating visit for BHI services, parallel to G0506 (the 
proposed add-on code for the CCM initiating visit).
    Response: We do not believe we have enough information about 
practice patterns at this time to create an add-on code to the BHI 
initiating visit, and we did not propose such a code. We may re-examine 
this issue in the future.
d. Beneficiary Consent for BHI Services
    Commenters to the CY 2016 PFS proposed rule indicated that they did 
not believe a specific patient consent for BHI services is necessary 
and indicated that requiring special informed consent

[[Page 80240]]

for these services may reduce access due to stigma associated with 
behavioral health conditions. Instead, the commenters recommended 
requiring a more general consent prior to initiating these services 
whereby the beneficiary gives the initiating physician or practitioner 
permission to consult with relevant specialists, which would include 
conferring with a psychiatric consultant. Accordingly, we proposed to 
require a general beneficiary consent to consult with relevant 
specialists prior to initiating these services, recognizing that 
applicable rules continue to apply regarding privacy. The proposed 
general consent would encompass conferring with a psychiatric 
consultant when furnishing the psychiatric CoCM codes (G0502, G0503, 
and G0504) or the proposed broader BHI code (G0507). Similar to the 
proposed beneficiary consent process for CCM services, we proposed that 
the billing practitioner must document in the beneficiary's medical 
record that the beneficiary's consent was obtained to consult with 
relevant specialists including a psychiatric consultant, and that, as 
part of the consent, the beneficiary is informed that there is 
beneficiary cost-sharing, including potential deductible and 
coinsurance amounts, for both in-person and non-face-to-face services 
that are provided. We solicited stakeholder comments on this proposal.
    We recognized that special informed consent could also be helpful 
in cases when a particular service is limited to being billed by a 
single practitioner for a particular beneficiary. We did not believe 
that there are circumstances where it would reasonable for multiple 
practitioners to be reporting these codes during the same month. 
However, we did not propose a formal limit at this time. We solicited 
comment on whether such a limitation would be beneficial or whether 
there are circumstances under which a beneficiary might reasonably 
receive BHI services from more than one practitioner during a given 
month.
    Comment: The commenters were largely supportive of our proposal 
regarding BHI consent, some noting that physician-to-physician 
communication as well as communication within treatment teams happens 
routinely, without an extra layer of formal written consent, for other 
medical conditions. A few commenters intimated that CMS might pursue a 
single broad consent that could be used across care management 
services; for example, applying for both CCM and BHI. We did not 
receive any public comments delineating the circumstances under which 
it would be appropriate to bill for services furnished using more than 
one BHI service model per month, or appropriate for more than one 
practitioner (whether in the same practice or different practices) to 
bill for services furnished in a BHI care model per month.
    Response: We agree with the commenters that physician-to-physician 
communication as well as communication within treatment teams happens 
routinely, without an extra layer of formal written consent, for other 
medical conditions. However there are particular privacy concerns 
addressed by other rules and regulations for some behavioral health or 
substance use care. Also we are concerned that beneficiaries should not 
incur unexpected expenses for care that is largely, or in significant 
part, non-face-to-face in nature. Finally, there are issues to 
consider, that we considered for CCM, regarding prevention of 
duplicative practitioner billing, and whether BHI services can actually 
be furnished under the direction and control of any given practitioner 
if for a given service period, more than one practitioner is furnishing 
BHI services and billing them.
    The public comments were supportive of our proposal for a broad 
consent that could be verbally obtained but must be documented in the 
medical record, and we are finalizing as proposed. At this time, we do 
not believe a single consent process for both BHI and CCM is advisable. 
It is not clear how frequently BHI and CCM would or should be furnished 
concurrently. BHI and CCM are distinct, separate services, having 
significant differences in time thresholds, the nature of the services, 
types of individuals providing the services, and payment and cost 
sharing amounts. Therefore, at this time, we are maintaining separate 
consent processes for CCM and BHI, as provided in the respective 
sections of this final rule. Also, as discussed in section II.E.4 on 
CCM, CCM and BHI may be billed during the same service period.
    It remains unclear whether it would be reasonable and necessary for 
more than one practitioner (whether in the same practice or different 
practices) to bill BHI services for a given beneficiary for a given 
service period, given the lack of public response and input on this 
issue. It may depend on the conditions(s) being treated and whether 
specialty care, other than psychiatric or behavioral health specialty 
care, and primary care are both involved. We are not proposing a formal 
limit at this time, but we stress that BHI services can only be 
reported by a treating physician or other qualified health care 
professional when he or she has obtained the required beneficiary 
consent, directed the BHI services he or she reports for the duration 
of time reported, and has a qualifying relationship with individuals 
providing the reported services under his or her direction and control. 
We would not expect a single practitioner to furnish care to a given 
beneficiary under more than one BHI model of care during a given month. 
Therefore a single practitioner must choose whether to report 
psychiatric CoCM code(s) (G0502, G0503, and G0504 as applicable) or the 
general BHI code (G0507) for a given month for a given beneficiary. We 
remind stakeholders that time cannot be counted more than once towards 
any code(s), all services must be medically reasonable and necessary, 
and that beneficiary cost sharing and advance consent apply. We will be 
monitoring the claims data and studying the utilization patterns. We 
will continue to assess appropriate reporting patterns, and we expect 
that potential coding changes by the CPT Editorial Panel may inform 
this issue.
    Comment: We received a number of comments recommending that cost 
sharing be removed for all care management services, whether through 
legislative change, demonstration, waiver safe harbor, or designation 
as preventive services.
    Response: We appreciate commenters' concerns and recognize many of 
the challenges associated with patient cost-sharing for these kinds of 
services. At this time, we do not have authority to waive cost sharing 
for the BHI or other care management services. We appreciate the 
commenters' acknowledgement of our current limitations and we will 
continue to consider this issue.
e. Summary of Final BHI Policies
    Beginning in CY 2017, we are providing separate payment for a range 
of BHI services. Specifically, we are providing payment for psychiatric 
CoCM services under the following codes:
     G0502: Initial psychiatric collaborative care management, 
first 70 minutes in the first calendar month of behavioral health care 
manager activities, in consultation with a psychiatric consultant, and 
directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Outreach to and engagement in treatment of a patient directed by 
the treating physician or other qualified health care professional;
    ++ Initial assessment of the patient, including administration of 
validated rating scales, with the development of an individualized 
treatment plan;

[[Page 80241]]

    ++ Review by the psychiatric consultant with modifications of the 
plan if recommended;
    ++ Entering patient in a registry and tracking patient follow-up 
and progress using the registry, with appropriate documentation, and 
participation in weekly caseload consultation with the psychiatric 
consultant; and
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies.
     G0503: Subsequent psychiatric collaborative care 
management, first 60 minutes in a subsequent month of behavioral health 
care manager activities, in consultation with a psychiatric consultant, 
and directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Tracking patient follow-up and progress using the registry, with 
appropriate documentation;
    ++ Participation in weekly caseload consultation with the 
psychiatric consultant;
    ++ Ongoing collaboration with and coordination of the patient's 
mental health care with the treating physician or other qualified 
health care professional and any other treating mental health 
providers;
    ++ Additional review of progress and recommendations for changes in 
treatment, as indicated, including medications, based on 
recommendations provided by the psychiatric consultant;
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies;
    ++ Monitoring of patient outcomes using validated rating scales; 
and relapse prevention planning with patients as they achieve remission 
of symptoms and/or other treatment goals and are prepared for discharge 
from active treatment.
     G0504: Initial or subsequent psychiatric collaborative 
care management, each additional 30 minutes in a calendar month of 
behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional (List separately in addition to code 
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
    These psychiatric CoCM services are reported by the treating 
physician or other qualified health care professional for services 
furnished during a calendar month service period. These services may be 
furnished when a beneficiary has a psychiatric or behavioral health 
condition(s) that in the treating physician or other qualified health 
care professional's clinical judgment, requires a behavioral health 
care assessment; establishing, implementing, revising, or monitoring a 
care plan; and provision of brief interventions. The diagnosis or 
diagnoses may be pre-existing or made by the treating physician or 
other qualified health care professional, and may be refined over time. 
The psychiatric CoCM services may be furnished to beneficiaries with 
any psychiatric or behavioral health condition(s) that is being treated 
by the physician or other qualified health care professional, including 
substance use disorders. Beneficiaries receiving psychiatric CoCM 
services may, but are not required to have comorbid chronic or other 
medical condition(s) that are being managed by the treating 
practitioner.
    Psychiatric CoCM services include the services of the treating 
physician or other qualified health care professional, the behavioral 
health care manager (see description below) who provides services 
incident to services of the treating physician or other qualified 
health care professional, and the psychiatric consultant (see 
description below) whose consultative services are furnished incident 
to services of the treating physician or other qualified health care 
professional. Time spent by administrative or clerical staff cannot be 
counted towards the time required to bill the psychiatric CoCM service 
codes.
    Beneficiaries receiving psychiatric CoCM services may have newly 
diagnosed conditions, need help in engaging in treatment, have not 
responded to standard care delivered in a non-psychiatric setting, or 
require further assessment and engagement prior to consideration of 
referral to a psychiatric care setting. Beneficiaries are treated for 
an episode of care, defined as beginning when the behavioral health 
care manager engages in care of the beneficiary under the appropriate 
supervision of the billing practitioner and ending with:
     The attainment of targeted treatment goals, which 
typically results in the discontinuation of care management services 
and continuation of usual follow-up with the treating physician or 
other qualified healthcare professional; or
     Failure to attain targeted treatment goals culminating in 
referral to a psychiatric care provider for ongoing treatment; or
     Lack of continued engagement with no psychiatric 
collaborative care management services provided over a consecutive 6-
month calendar period (break in episode).

A new episode of care will start after a break in episode of 6 calendar 
months or more.
    The treating physician or other qualified health care professional 
directs the behavioral health care manager and continues to oversee the 
beneficiary's care, including prescribing medications, providing 
treatments for medical conditions, and making referrals to specialty 
care when needed. The treating physician or other qualified health care 
professional must remain involved in ongoing oversight, management, 
collaboration and reassessment as appropriate to bill the psychiatric 
CoCM codes.
    The behavioral health care manager has formal education or 
specialized training in behavioral health (which could include a range 
of disciplines, for example, social work, nursing, and psychology). The 
behavioral health care manager provides care management services, as 
well as an assessment of needs, including the administration of 
validated rating scales; \11\ behavioral health care planning in 
relation to behavioral/psychiatric health problems, including revision 
for patients who are not progressing or whose status changes; provision 
of brief interventions; ongoing collaboration with the treating 
physician or other qualified health care professional; maintenance of a 
registry; \12\ all in consultation with the psychiatric consultant. The 
behavioral health care manager is available to provide these services 
face-to-face and non-face-to-face, and consults with the psychiatric 
consultant minimally on a weekly basis.
---------------------------------------------------------------------------

    \11\ For example, see https://aims.uw.edu/resource-library/measurement-based-treatment-target.
    \12\ For example, see https://aims.uw.edu/collaborative-care/implementation-guide/plan-clinical-practice-change/identify-population-based.
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    The behavioral health care manager must have a collaborative, 
integrated relationship with the rest of the care team members, and be 
able to perform all of the required elements of the service delineated 
for the behavioral health care manager. The behavioral health care 
manager must have the ability to engage the beneficiary outside of 
regular clinic hours as necessary to perform the behavioral health care 
manager's duties under the psychiatric CoCM model, and must have a 
continuous relationship with the beneficiary. The behavioral health 
care manager may or may not be a

[[Page 80242]]

professional who meets all the requirements to independently furnish 
and report services to Medicare. The behavioral health care manager is 
subject to the incident to rules and regulations and applicable state 
law, licensure and scope of practice (see 42 CFR 410.26).
    The psychiatric consultant is a medical professional trained in 
psychiatry and qualified to prescribe the full range of medications. 
The psychiatric consultant advises and makes recommendations, as 
needed, for psychiatric and other medical care, including psychiatric 
and other medical diagnoses, treatment strategies including appropriate 
therapies, medication management, medical management of complications 
associated with treatment of psychiatric disorders, and referral for 
specialty services, that are communicated to the treating physician or 
other qualified health care professional, typically through the 
behavioral health care manager. The psychiatric consultant does not 
typically see the beneficiary or prescribe medications, except in rare 
circumstances, but can and should facilitate referral for direct 
provision of psychiatric care when clinically indicated. The 
psychiatric consultant is subject to the incident to rules and 
regulations and applicable state law, licensure and scope of practice 
(see 42 CFR 410.26).
    Beginning in CY 2017, we are providing separate payment for BHI 
services furnished under models of care other than the psychiatric CoCM 
model, under HCPCS code G0507: Care management services for behavioral 
health conditions, at least 20 minutes of clinical staff time, directed 
by a physician or other qualified health care professional, per 
calendar month, with the following required elements:
     Initial assessment or follow-up monitoring, including the 
use of applicable validated rating scales;
     Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are 
not progressing or whose status changes;
     Facilitating and coordinating treatment such as 
psychotherapy, pharmacotherapy, counseling and/or psychiatric 
consultation; and
     Continuity of care with a designated member of the care 
team.
    G0507 is reported by the treating physician or other qualified 
health care professional for services furnished during a calendar month 
service period. This service may be furnished when the beneficiary has 
a psychiatric or behavioral health condition(s) that in the treating 
physician or other qualified health care professional's clinical 
judgment, requires a behavioral health care assessment, behavioral 
health care planning, and provision of interventions. The presenting 
condition(s) may be pre-existing or newly diagnosed by the treating 
physician or other qualified health care professional, and may be 
refined over time. Beneficiaries receiving services reported under 
G0507 may have any psychiatric or behavioral health condition(s) that 
is being treated by the physician or other qualified health care 
professional, including substance use disorders. Beneficiaries 
receiving services reported under G0507 may, but are not required to 
have comorbid chronic or other medical condition(s) that are being 
managed by the treating practitioner.
    Services reported under G0507 may be provided directly by the 
treating physician or other qualified health care professional, or 
provided by clinical staff under his or her direction, during a 
calendar month service period. For G0507, there is not necessarily a 
specific individual designated as a ``behavioral health care manager'' 
with formal or specialized education in providing the services 
(although there could be). Similarly, there is not necessarily a 
psychiatric or other behavioral health specialist consultant (although 
there could be) and we note that G0507 is not valued to explicitly 
account for expert consultation. For G0507, the term ``clinical staff'' 
means the CPT definition of this term, subject to the incident to rules 
and regulations and applicable state law, licensure and scope of 
practice at 42 CFR 410.26. For G0507, then, we note that the term 
``clinical staff'' will encompass or include any psychiatric or other 
behavioral health specialist consultant that may provide consultative 
services. Clinical staff providing services are not required to be 
employed by the treating practitioner or located on site, and these 
individuals may or may not be a professional permitted to independently 
furnish and report services to Medicare. Time spent by administrative 
or clerical staff cannot be counted towards the time required to report 
G0507. We emphasize that the physician or other qualified health care 
professional must direct the service, continue to oversee the 
beneficiary's care, and perform ongoing management, collaboration and 
reassessment. If the service (or part thereof) is provided incident to 
services of the treating practitioner, whether on site or remotely, the 
clinical staff providing services must have a collaborative, integrated 
relationship with the treating practitioner. They must also have a 
continuous relationship with the beneficiary.
    For all of the BHI service codes (G0502, G0503, G0504 and G0507), 
we are requiring an initiating visit that is billable separate from the 
BHI services themselves. The same services that qualify as initiating 
visits for CCM services can serve as the initiating visit for BHI 
services (certain face-to-face E/M services including the face-to-face 
visit required for TCM services, and the AWV or IPPE). The BHI 
initiating visit establishes the beneficiary's relationship with the 
treating practitioner (BHI services may be furnished incident to the 
treating practitioner's professional services); ensures that the 
treating practitioner assesses the beneficiary prior to initiating care 
management processes; and provides an opportunity to obtain beneficiary 
consent (consent may also be obtained outside of the BHI initiating 
visit, as long as it is obtained prior to commencement of BHI 
services).
    For all of the BHI service codes, we are also requiring prior 
beneficiary consent, recognizing that applicable rules continue to 
apply regarding privacy. The consent will include permission to consult 
with relevant specialists including a psychiatric consultant, and 
inform the beneficiary that cost sharing will apply to in-person and 
non-face-to-face services provided. Consent may be verbal (written 
consent is not required) but must be documented in the medical record.
    For payment purposes, we are assigning general supervision to all 
of the BHI service codes (G0502, G0503, G0504 and G0507). However we 
note that general supervision does not, by itself, comprise a 
qualifying relationship between the treating practitioner and other 
individuals providing BHI services under the incident to relationship. 
Also we note that we valued BHI services in both facility and non-
facility settings. BHI services may be furnished to beneficiaries in 
any setting of care. Time that is spent furnishing BHI services to a 
beneficiary who is an inpatient or in any other facility setting during 
service provision or for any part of the service period may be counted 
towards reporting a BHI code(s). We refer the reader to our discussion 
above on this matter, as well as reporting by specialty, intersection 
with other services, and potential reporting by more than one 
practitioner for a given beneficiary within a service period. A single 
practitioner must choose whether to report psychiatric CoCM code(s) 
(G0502, G0503, and

[[Page 80243]]

G0504 as applicable) or the general BHI code (G0507) for a given month 
(service period) for a given beneficiary.
4. Reducing Administrative Burden and Improving Payment Accuracy for 
Chronic Care Management (CCM) Services
    Beginning in CY 2015, we implemented separate payment for CCM 
services under CPT code 99490 (Chronic care management services, at 
least 20 minutes of clinical staff time directed by a physician or 
other qualified health professional, per calendar month, with the 
following required elements:
     Multiple (two or more) chronic conditions expected to last 
at least 12 months, or until the death of the patient;
     Chronic conditions place the patient at significant risk 
of death, acute exacerbation/decompensation, or functional decline;
     Comprehensive care plan established, implemented, revised, 
or monitored).
    In the CY 2015 final rule with comment period, we finalized a 
proposal to make separate payment for CCM services as one initiative in 
a series of initiatives designed to improve payment for, and encourage 
long-term investment in, care management services (79 FR 67715). In 
particular, we sought to address an issue raised to us by the physician 
community, which stated that the care management included in many of 
the existing E/M services, such as office visits, does not adequately 
describe the typical non-face-to-face care management work required by 
certain categories of beneficiaries (78 FR 43337). We began to re-
examine how Medicare should pay under the PFS for non-face-to-face care 
management services that were bundled into the PFS payment for face-to-
face E/M visits, being included in the pre- and post-encounter work (78 
FR 43337). In proposing separate payment for CCM, we acknowledged that, 
even though we had previously considered non-face-to-face care 
management services as bundled into the payment for face-to-face E/M 
visits, the E/M office/outpatient visit CPT codes may not reflect all 
the services and resources required to furnish comprehensive, 
coordinated care management for certain categories of beneficiaries. We 
stated that we believed that the resources required to furnish complex 
chronic care management services to beneficiaries with multiple (that 
is, two or more) chronic conditions were not adequately reflected in 
the existing E/M codes. Medical practice and patient complexity 
required physicians, other practitioners and their clinical staff to 
spend increasing amounts of time and effort managing the care of 
comorbid beneficiaries outside of face-to-face E/M visits, for example, 
complex and multidisciplinary care modalities that involve regular 
physician development and/or revision of care plans; subsequent report 
of patient status; review of laboratory and other studies; 
communication with other health care professionals not employed in the 
same practice who are involved in the patient's care; integration of 
new information into the care plan; and/or adjustments of medical 
therapy.
    Therefore, in the CY 2014 PFS final rule with comment period, we 
established a separate payment under the PFS for CPT code 99490 (78 FR 
43341 through 43342). We sought to include a relatively broad eligible 
patient population within the code descriptor, established a moderate 
payment amount, and established bundled payment for concurrently new 
CPT codes that were reserved for beneficiaries requiring ``complex'' 
CCM services (base CPT code 99487 and its add-on code 99489) (79 FR 
67716 through 67719). We stated that we would evaluate the services 
reported under CPT code 99490 to assess whether the service is targeted 
to the right population and whether the payment amount is appropriate 
(79 FR 67719). We remind stakeholders that CMS did not limit the 
eligible population to any particular list of chronic conditions other 
than the language in the CPT code descriptor. Accordingly, one or more 
of the chronic conditions being managed through CCM services could be 
chronic mental health or behavioral health conditions or chronic 
cognitive disorders, as long as the chronic conditions meet the 
eligibility language in the CPT code descriptor for CCM services and 
the billing practitioner meets all of Medicare's requirements to bill 
the code including comprehensive, patient-centered care planning for 
all health conditions.
    In finalizing separate payment for CPT code 99490, we considered 
whether we should develop standards to ensure that physicians and other 
practitioners billing the service would have the capability to fully 
furnish the service (79 FR 67721). We sought to make certain that the 
newly payable PFS code(s) would provide beneficiary access to 
appropriate care management services that are characteristic of 
advanced primary care, such as continuity of care; patient support for 
chronic diseases to achieve health goals; 24/7 patient access to care 
and health information; receipt of preventive care; patient, family and 
caregiver engagement; and timely coordination of care through 
electronic health information exchange. Accordingly, we established a 
set of scope of service elements and payment rules in addition to or in 
lieu of those established in CPT guidance (in the CPT code descriptor 
and CPT prefatory language), that the physician or nonphysician 
practitioner must satisfy to fully furnish CCM services and report CPT 
code 99490 (78 FR 74414 through 74427, 79 FR 67715 through 67730, and 
80 FR 14854). We established requirements to furnish a preceding 
qualifying visit, obtain advance written beneficiary consent, use 
certified electronic health record (EHR) technology to furnish certain 
elements of the service, share the care plan and clinical summaries 
electronically, document specified activities, and other items 
summarized in Table 11 of our CY 2017 proposed rule. For the CCM 
service elements for which we required use of a certified EHR, the 
billing practitioner must use, at a minimum, technology meeting the 
edition(s) of certification criteria that is acceptable for purposes of 
the EHR Incentive Programs as of December 31st of the calendar year 
preceding each PFS payment year. (For the CY 2017 PFS payment year, 
this would mean technology meeting the 2014 edition of certification 
criteria).
    These elements and requirements for separately payable CCM services 
are extensive and generally exceed those required for payment of codes 
describing procedures, diagnostic tests, or other E/M services under 
the PFS. In addition, both CPT guidance and Medicare rules specify that 
only a single practitioner who assumes the care management role for a 
given beneficiary can bill CPT code 99490 per service period (calendar 
month). Because the new CCM service closely overlapped with several 
Medicare demonstration models of advanced primary care (the Multi-Payer 
Advanced Primary Care Practice (MAPCP) demonstration and the 
Comprehensive Primary Care Initiative (CPCI)), we provided that 
practitioners participating in one of these two initiatives could not 
be paid for CCM services furnished to a beneficiary attributed by the 
initiative to their practice (79 FR 67729).
    Given the non-face-to-face nature of CCM services, we also sought 
to ensure that beneficiaries would receive advance notice that Part B 
cost sharing applies since we currently have no legislative authority 
to ``waive'' cost sharing for this service. Also since only one 
practitioner can bill for CCM each service period, we believed the

[[Page 80244]]

beneficiary notice requirement would help prevent duplicate payment to 
multiple practitioners.
    Since the establishment of CPT code 99490 for separate payment of 
CCM services, in a number of forums and in public comments to the CY 
2016 PFS final rule (80 FR 70921), many practitioners have stated that 
the service elements and billing requirements are burdensome, redundant 
and prevent them from being able to provide the services to 
beneficiaries who could benefit from them. Stakeholders have stated 
that CPT code 99490 is underutilized because it is underpaid relative 
to the resources involved in furnishing the services, especially given 
the extensive Medicare rules for payment, and they have suggested a 
number of potential changes to our current payment rules. Stakeholders 
continue to believe that many of the CCM payment rules are duplicative, 
and to recommend that we reduce the rules and expand CCM coding and 
payment to distinguish among different levels of patient complexity. We 
also note that section 103 of the MACRA requires CMS to assess and 
report to Congress (no later than December 31, 2017) on access to CCM 
services by underserved rural and racial and ethnic minority 
populations and to conduct an outreach/education campaign that is 
underway.
    The professional claims data for CPT code 99490 show that 
utilization is steadily increasing but may remain low considering the 
number of eligible Medicare beneficiaries. To date, approximately 
513,000 unique Medicare beneficiaries received the service an average 
of four times each, totaling $93 million in total payments. Since CPT 
code 99490 describes a minimum of 20 minutes of clinical staff time 
spent furnishing CCM services during a month and does not have an upper 
time limit, and since we currently do not separately pay the other 
codes in the CCM family of CPT codes (which would provide us with 
utilization data on the number of patients requiring longer service 
times during a billing period), we do not know how often beneficiaries 
required more than 20 minutes of CCM services per month. We also do not 
know their complexity relative to one another, other than meeting the 
acuity criteria in the CPT code descriptor. Initial information from 
practitioner interviews conducted as part of our CCM evaluation efforts 
indicates that practitioners overwhelmingly meet and exceed the 20-
minute threshold time for billing CCM. Typically, these practitioners 
reported spending between 45 minutes and an hour per month on CCM 
services for each patient, with times ranging between 20 minutes and 
several hours per month. CCM beneficiaries tend to exhibit a higher 
disease burden, are more likely to be dually eligible for Medicare and 
Medicaid, and are older than the general Medicare fee-for-service 
population.\13\ However, absent multiple levels of CCM coding, we do 
not have comprehensive data on the relative complexity of the CCM 
services furnished to beneficiaries.
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    \13\ Schurrer, John, and Rena Rudavsky. ``Evaluation of the 
Diffusion and Impact of the Chronic Care Management (CCM) Fees: 
Third Quarterly Report.'' Report submitted to the Center for 
Medicare and Medicaid Innovation. Washington, DC: Mathematica Policy 
Research, May 6, 2016.
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    In light of this stakeholder feedback and our mandate under MACRA 
section 103 to encourage and report on access to CCM services, we 
proposed several changes in the payment rules for CCM services. Our 
primary goal, and our statutory mandate, is to pay as accurately as 
possible for services furnished to Medicare beneficiaries based on the 
relative resources required to furnish PFS services, including CCM 
services. In so doing, we also expect to facilitate beneficiaries' 
access to reasonable and necessary CCM services that improve health 
outcomes. First, for CY 2017 we proposed to more appropriately 
recognize and pay for the other codes in the CPT family of CCM services 
(CPT codes 99487 and 99489 describing complex CCM), consistent with our 
general practice to price services according to their relative ranking 
within a given family of services. We direct the reader to section II.L 
of this final rule for a discussion of valuation for base CPT code 
99487 and its add-on CPT code 99489. The CPT code descriptors are:
     CPT code 99487--Complex chronic care management services, 
with the following required elements:
    ++ Multiple (two or more) chronic conditions expected to last at 
least 12 months, or until the death of the patient;
    ++ Chronic conditions place the patient at significant risk of 
death, acute exacerbation/decompensation, or functional decline;
    ++ Establishment or substantial revision of a comprehensive care 
plan;
    ++ Moderate or high complexity medical decision making;
    ++ 60 minutes of clinical staff time directed by a physician or 
other qualified health care professional, per calendar month.
     CPT code 99489--Each additional 30 minutes of clinical 
staff time directed by a physician or other qualified health care 
professional, per calendar month (List separately in addition to code 
for primary procedure).
    As CPT provides, less than 60 minutes of clinical staff time in the 
service period could not be reported separately, and similarly, less 
than 30 minutes in addition to the first 60 minutes of complex CCM in a 
service period could not be reported. We would require 60 minutes of 
services for reporting CPT code 99487 and 30 additional minutes for 
each unit of CPT code 99489.
    We proposed to adopt the CPT provision that CPT codes 99487, 99489 
and 99490 may only be reported once per service period (calendar month) 
and only by the single practitioner who assumes the care management 
role with a particular beneficiary for the service period. That is, a 
given beneficiary would be classified as eligible to receive either 
complex or non-complex CCM during a given service period, not both, and 
only one professional claim could be submitted to the PFS for CCM for 
that service period by one practitioner.
    Comment: Several commenters were supportive of separate payment for 
complex CCM services.
    Response: We thank the commenters for their support and are 
finalizing separate payment for CPT codes 99487 and 99489 as proposed. 
As finalized, these separate payments for complex CCM services will 
support care management for the most complex and time-consuming cases 
of beneficiaries with multiple chronic conditions.
    Except for differences in the CPT code descriptors, we proposed to 
require the same CCM service elements for CPT codes 99487, 99489 and 
99490. In other words, all the requirements in Table 11 of our proposed 
rule would apply, whether the code being billed for the service period 
is CPT code 99487 (plus CPT code 99489, if applicable) or CPT code 
99490. These three codes would differ in the amount of clinical staff 
service time provided; the complexity of medical decision-making as 
defined in the E/M guidelines (determined by the problems addressed by 
the reporting practitioner during the month); and the nature of care 
planning that was performed (establishment or substantial revision of 
the care plan for complex CCM versus establishment, implementation, 
revision or monitoring of the care plan for non-complex CCM). Billing 
practitioners could consider identifying beneficiaries who require 
complex CCM services using criteria suggested in CPT guidance (such as 
number of illnesses, number of medications or repeat admissions or 
emergency department visits) or the profile of typical patients in the 
CPT

[[Page 80245]]

prefatory language, but these would not comprise Medicare conditions of 
eligibility for complex CCM.
    We proposed several changes to our current scope of service 
elements for CCM, and proposed that the same scope of service elements, 
as amended, would apply to all codes used to report CCM services 
beginning in 2017 (i.e., CPT codes 99487, 99489 and 99490). In 
particular, we proposed changes in the requirements for the initiating 
visit, 24/7 access to care and continuity of care, format and sharing 
of the care plan and clinical summaries, beneficiary receipt of the 
care plan, beneficiary consent and documentation.
    Comment: Commenters were broadly supportive of these proposals. We 
received several comments recommending changes to the scope of service 
for non-complex CCM that might improve the distinction between non-
complex and complex CCM and inform which ``level'' of service a given 
beneficiary is eligible for. For example, these commenters suggested 
changes to the time included in the code descriptor to reflect two or 
more time increments for CPT code 99490 using add-on codes, or 
retaining the current low time threshold while allowing practitioners 
to choose among certain service elements. Some commenters do not 
believe CPT code 99490 is intended for beneficiaries who require all 
the current service elements in a given month, and that only a more 
limited set of elements is medically necessary for the non-complex 
population.
    Response: We appreciate the commenters' recommendations about how 
we might better distinguish complex CCM services from non-complex CCM 
services. The CPT Editorial Panel currently maintains the coding for 
CCM services. Further changes in codes and/or descriptors may be 
appropriately addressed by CPT and in subsequent PFS rulemaking.
a. CCM Initiating Visit & Add-On Code (G0506)
    As provided in the CY 2014 PFS final rule with comment period (78 
FR 74425) and subregulatory guidance (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Payment_for_CCM_Services_FAQ.pdf), CCM must be initiated by the billing 
practitioner during a ``comprehensive'' E/M visit, AWV or IPPE. This 
face-to-face, initiating visit is not part of the CCM service and can 
be separately billed to the PFS, but is required before CCM services 
can be provided directly or under other arrangements. The billing 
practitioner must discuss CCM with the patient at this visit. While 
informed patient consent does not have to be obtained during this 
visit, the visit is an opportunity to obtain the required consent. The 
face-to-face visit included in transitional care management (TCM) 
services (CPT codes 99495 and 99496) qualifies as a ``comprehensive'' 
visit for CCM initiation. Levels 2 through 5 E/M visits (CPT codes 
99212 through 99215) also qualify; CMS does not require the practice to 
initiate CCM during a level 4 or 5 E/M visit. However, CPT codes that 
do not involve a face-to-face visit by the billing practitioner or are 
not separately payable by Medicare (such as CPT code 99211, 
anticoagulant management, online services, telephone and other E/M 
services) do not qualify as initiating visits. If the practitioner 
furnishes a ``comprehensive'' E/M, AWV, or IPPE and does not discuss 
CCM with the patient at that visit, that visit cannot count as the 
initiating visit for CCM.
    We continued to believe that we should require an initiating visit 
in advance of furnishing CCM services, separate from the services 
themselves, because a face-to-face visit establishes the beneficiary's 
relationship with the billing practitioner and most aspects of the CCM 
services are furnished incident to the billing practitioner's 
professional services. The initiating visit also ensures collection of 
comprehensive health information to inform the care plan. We continued 
to believe that the types of face-to-face services that qualify as an 
initiating visit for CCM are appropriate. We did not propose to change 
the kinds of visits that can qualify as initiating CCM visits. However, 
we proposed to require the initiating visit only for new patients or 
patients not seen within one year instead of for all beneficiaries 
receiving CCM services. We believed this would allow practitioners with 
existing relationships with patients who have been seen relatively 
recently to initiate CCM services without furnishing a potentially 
unnecessary E/M visit. We solicited public comment on whether a period 
of time shorter than one year would be more appropriate.
    Comment: The commenters were generally supportive of requiring the 
CCM initiating visit only for beneficiaries who are new patients or 
have not been seen in a year. A few commenters suggested a 6-month 
timeframe, or adopting one year and reconsidering as we gain more 
experience with CCM. Some commenters misinterpreted our proposal as 
requiring face-to-face visits every year to periodically reassess the 
beneficiary or the appropriateness of CCM services. Some recommended a 
similar coding structure for specialists managing a single condition, 
in place of prolonged services, or for BHI services.
    Response: Our intent was to revise the timeframe for the single CCM 
initiating visit that is required at the outset of services. We did not 
propose subsequent ``re-initiation'' of CCM services or face-to-face 
reassessment within a given timeframe. We discuss further below that we 
have some concerns about how to ensure that the billing practitioner 
remains involved in the beneficiary's care and continually reassesses 
the beneficiary's care, but at this time we do not believe we should 
require subsequent face-to-face visits within certain timeframes to 
address those concerns.
    We believe that the proposed one-year timeframe for the single, CCM 
initiating visit is appropriate for CY 2017, so we are finalizing as 
proposed. We will require the CCM initiating visit only for new 
patients or patients not seen within the year prior to commencement of 
CCM (instead of for all beneficiaries receiving CCM services). We will 
continue to consider in future years whether a different timeframe is 
warranted. The goal of our final policy is to allow practitioners with 
existing relationships with beneficiaries who have been seen relatively 
recently to initiate CCM services (for the first time) without 
furnishing a potentially unnecessary E/M visit. Regarding subsequent 
visits (after CCM services begin), practitioners are already permitted 
to furnish and separately bill subsequent E/M visits (or AWVs) for 
beneficiaries receiving CCM services. If a face-to-face reassessment is 
reasonable and necessary and furnished by the billing practitioner, 
then he or she may bill an appropriate code describing the face-to-face 
assessment of a beneficiary to whom they have previously furnished CCM 
services.
    We also proposed for CY 2017 to create a new add-on G-code that 
would improve payment for services that qualify as initiating visits 
for CCM services. The code would be billable for beneficiaries who 
require extensive face-to-face assessment and care planning by the 
billing practitioner (as opposed to clinical staff), through an add-on 
code to the initiating visit, G0506 (Comprehensive assessment of and 
care planning by the physician or other qualified health care 
professional for patients requiring chronic care management services 
(billed separately from monthly care management services) (Add-on code, 
list separately in addition to primary service)).
    We proposed that when the billing practitioner initiating CCM 
personally

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performs extensive assessment and care planning outside of the usual 
effort described by the billed E/M code (or AWV or IPPE code), the 
practitioner could bill G0506 in addition to the E/M code for the 
initiating visit (or in addition to the AWV or IPPE), and in addition 
to the CCM CPT code 99490 (or proposed 99487 and 99489) if all 
requirements to bill for CCM services are also met. We proposed 
valuation for G0506 in a separate section of our proposed rule.
    The code G0506 would account specifically for additional work of 
the billing practitioner in personally performing a face-to-face 
assessment of a beneficiary requiring CCM services, and personally 
performing CCM care planning (the care planning could be face-to-face 
and/or non-face-to-face) that is not already reflected in the 
initiating visit itself (nor in the monthly CCM service code). We 
believed G0506 might be particularly appropriate to bill when the 
initiating visit is a less complex visit (such as a level 2 or 3 E/M 
visit), although G0506 could be billed along with higher level visits 
if the billing practitioner's effort and time exceeded the usual effort 
described by the initiating visit code. It could also be appropriate to 
bill G0506 when the initiating visit addresses problems unrelated to 
CCM, and the billing practitioner does not consider the CCM-related 
work he or she performs in determining what level of initiating visit 
to bill. We believed that this proposal would more appropriately 
recognize the relative resource costs for the work of the billing 
practitioner in initiating CCM services, specifically for extensive 
work assessing the beneficiary and establishing the CCM care plan that 
is reasonable and necessary, and that is not accounted for in the 
billed initiating visit or in the unit of the CCM service itself that 
is billed for a given service period. In addition, we believed this 
proposal would help ensure that the billing practitioner personally 
performs and meaningfully contributes to the establishment of the CCM 
care plan when the patient's complexity warrants it.
    Comment: Several commenters were supportive of the add-on code 
(G0506) to the CCM initiating visit to describe physician assessment 
and care planning for patients requiring CCM services. Some commenters 
raised questions about whether G0506 should be a one-time service or 
could also be billed as an add-on code to subsequent reassessments by 
the billing practitioner (whether E/M visits or subsequent AWVs).
    Response: At this time, we do not believe we should permit billing 
of G0506 more than once by the billing practitioner for a given 
beneficiary. G0506 was proposed as an add-on code to the single 
initiating visit, to help ensure the billing practitioner's assessment 
and involvement at the outset of CCM services. At this time there are 
no requirements for the billing practitioner to ``re-initiate'' CCM 
services; therefore we do not believe we should create an add-on code 
for a CCM ``re-initiation'' service. We would have to define ``re-
initiation'' and develop rules regarding when subsequent E/M visits or 
AWVs are related to the performance of CCM. We do not believe 
beneficiaries would understand why they are incurring additional cost 
sharing for an add-on code to a ``re-initiation'' visit that has not 
been required or defined by CMS.
    As we stated in the CY 2017 proposed rule, we were very interested 
in coding that was presented to the CPT Editorial Panel, but not 
adopted, to create code(s) that would separately identify and account 
for monthly CCM work by the billing practitioner. Such coding may be a 
better means of separately identifying and valuing the subsequent work 
of the billing practitioner after CCM is initiated. We want to 
establish policies that help ensure that the billing practitioner is 
not merely handing the beneficiary off to a remote care manager under 
general supervision while no longer remaining involved in their care. 
We believe that the practitioner billing CCM services should be 
actively re-assessing the beneficiary's chronic conditions, reviewing 
whether treatment goals are being met, updating the care plan, 
performing any medical decision-making that is not within the scope of 
practice of clinical staff, performing any necessary face-to-face care, 
and performing other related work. However, it would be more 
straightforward to separately identify this CCM-related work under 
code(s) that in their own right describe it, instead of add-on codes to 
very broadly drawn E/M codes where it becomes difficult to assess the 
relationship between the two services. Also for beneficiaries receiving 
complex CCM, some of this work is explicitly included in the complex 
CCM service codes (i.e., medical decision-making of moderate to high 
complexity). Therefore, at this time, G0506 will only serve as an add-
on code to describe work performed by the billing practitioner once, in 
conjunction with the start or initiation of CCM services.
    We note that despite the role of the billing practitioner in the 
initiation and provision of CCM services provided by clinical staff, 
non-complex CCM (CPT code 99490) is described based on the time spent 
by clinical staff. Complex CCM (CPT codes 99487 and 99489) similarly 
counts only clinical staff time, although it also includes complex 
medical decision-making by the billing practitioner. This raises issues 
regarding appropriate valuation in the facility setting that we will 
continue to consider in future rulemaking. The facility PE RVU for CCM 
includes indirect PE (which is an allocation based on physician work), 
but no direct PE (which would be comprised of other labor, supplies and 
equipment). This is because historically, the PFS facility rate assumes 
that the billing practitioner is not bearing a significant resource 
cost in labor by other individuals, equipment or supplies. Medicare 
assumes that those costs are instead borne by the facility and 
adequately accounted for in a separate payment made to the facility. 
The PFS non-facility rate generally does include such costs, assuming 
that the billing practitioner bears the resource costs in clinical and 
other staff labor, supplies and equipment.
    For CCM, we have been considering whether this approach to 
valuation remains appropriate, because the service, in whole or in 
significant part, is provided by clinical staff under the direction of 
the billing practitioner. These individuals may provide the service or 
part thereof remotely, and are not necessarily employees or staff of 
the facility. Under this construct, there may be more direct practice 
expense borne by the billing practitioner that should be separately 
identified and valued over and above any institutional payment to the 
facility for its staff and infrastructure. We plan to explore these 
issues in future rulemaking and consider other approaches to valuation 
that would recognize the accurate relative resource costs to the 
billing practitioner for CCM and similar services furnished to 
beneficiaries who remain or reside in a facility setting during some or 
all of the service period.
    Consistent with general coding guidance, we proposed that the work 
that is reported under G0506 (including time) could not also be 
reported under or counted towards the reporting of any other billed 
code, including any of the monthly CCM services codes. The care plan 
that the practitioner must create to bill G0506 would be subject to the 
same requirements as the care plan included in the monthly CCM 
services, namely, it must be an electronic patient-centered care plan 
based on a physical, mental, cognitive, psychosocial, functional and 
environmental (re)assessment and an

[[Page 80247]]

inventory of resources and supports; a comprehensive care plan for all 
health issues. This would distinguish it from the more limited care 
planning included in the BHI codes G0502, G0503, G0504 or G0507 which 
focus on behavioral health issues, or the care planning included in 
G0505 which focuses on cognitive status. We sought public input on 
potential overlap among these codes and further clinical input as to 
how the assessments and care planning that is included in them would 
differ.
    We received a number of comments regarding the relationship between 
proposed G0506, G0505 (Cognition and functional assessment by the 
physician or other qualified health care professional in office or 
other outpatient), prolonged non-face-to-face services, and BHI. We 
address these comments in the sections of this final rule regarding 
G0505, prolonged non-face-to-face services and BHI services (sections 
II.E.5, II.E.2 and II.E.3). In brief, we are not allowing G0506 and 
G0505 to be billed the same day (by a single practitioner). G0506 will 
not be an add-on code for the BHI initiating visit or BHI services. 
G0506 will be a one-time service code for CCM initiation, and the 
billing practitioner must choose whether to report either G0506 or 
prolonged services in association with CCM initiation (if requirements 
to bill both are met).
    The CCM and BHI service codes differ substantially in potential 
diagnosis and comorbidity, the expected duration of the condition(s) 
being treated, the kind of care planning performed (comprehensive care 
planning versus care planning focused on behavioral/mental health 
issues), service elements and who performs them, and the interventions 
the beneficiary needs and receives apart from the CCM and BHI services 
themselves. The BHI codes include a more focused process than CCM for 
the clinical integration of primary care and behavioral health/
psychiatric care, and for continual reassessment and treatment 
progression to a target or goal outcome that is specific to mental and 
behavioral health or substance abuse issues. However there is no 
explicit BHI service element for managing care transitions or 
systematic assessment of receipt of preventive services; there is no 
requirement to perform comprehensive care planning for all health 
issues (not just behavioral health issues); and there are different 
emphases on medication management or medication reconciliation, if 
applicable. In deciding which code(s) to report for services furnished 
to a beneficiary who is eligible for both CCM and BHI services, 
practitioners should consider which service elements were furnished 
during the service period, who provided them, how much time was spent, 
and should select the code(s) that most accurately and specifically 
identifies the services furnished without duplicative time counting. 
Practitioners should generally select the more specific code(s) when an 
alternative code(s) potentially includes the services provided. We are 
not precluding use of the CCM codes to report, or count, behavioral 
health care management if it is provided as part of a broader CCM 
service by a practitioner who is comprehensively overseeing all of the 
beneficiary's health issues, even if there are no imminent non-
behavioral health needs. However, such behavioral care management 
activities could not also be counted towards reporting a BHI code(s). 
If a BHI service code more specifically describes the service furnished 
(service time and other relevant aspects of the service being equal), 
or if there is no focus on the health of the beneficiary outside of a 
narrower set of behavioral health issues, then it is more appropriate 
to report the BHI code(s) than the CCM code(s). Similarly, it may be 
more appropriate for certain specialists to bill BHI services than CCM 
services, since specialists are more likely to be managing the 
beneficiary's behavioral health needs in relation to a narrow subset of 
medical condition(s). CCM and BHI services can only be billed the same 
month for the same beneficiary if all the requirements to bill each 
service are separately met. We will monitor the claims data, and we 
welcome further stakeholder input to inform appropriate reporting 
rules.
b. 24/7 Access to Care, Continuity of Care, Care Plan and Managing 
Transitions
    We proposed several revisions to the scope of service elements of 
24/7 Access to Care, Continuity of Care, Care Plan and Managing 
Transitions. We continued to believe these elements are important 
aspects of CCM services, but that we should reduce the requirements for 
the use of specified electronic health information technology (IT) in 
their provision. In sum, we proposed to retain a core requirement to 
use a certified electronic health record (EHR), but allow fax to count 
for electronic transmission of clinical summaries and the care plan; no 
longer require access to the electronic care plan outside of normal 
business hours to those providing CCM services; and remove standards 
for clinical summaries in managing care transitions.
    We sought to improve alignment with CPT provisions by removing the 
requirement for the care plan to be available remotely to individuals 
providing CCM services after hours. Studies have shown that after-hours 
care is best implemented as part of a larger practice approach to 
access and continuity (see for example, the peer-review article 
available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/). 
There is substantial local variation in how 24/7 access and continuity 
of care are achieved, depending on the contractual relationships among 
practitioners and providers in a particular geographic area and other 
factors. Care models include various contractual relationships between 
physician practices and after-hours clinics, urgent care centers and 
emergency departments; extended primary care office hours; physician 
call-sharing; telephone triage systems; and health information 
technology such as shared EHRs and systematic notification procedures 
(http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/). Some or all of 
these may be used to provide access to urgent care on a 24/7 basis 
while maintaining information continuity between providers.
    We recognized that some models of care require more significant 
investment in practice infrastructure than others, for example 
resources in staffing or health information technology. In addition, we 
believed there is room to reduce the administrative complexity of our 
current payment rules for CCM services to accommodate a range of 
potential care models. In re-examining what should be included in the 
CCM scope of service elements for 24/7 Access to Care and Continuity of 
Care, we believed the CPT language adequately and more appropriately 
describes the services that should, at a minimum, be included in these 
service elements. Therefore, we proposed to adopt the CPT language for 
these two elements. For 24/7 Access to Care, the scope of service 
element would be to provide 24/7 access to physicians or other 
qualified health care professionals or clinical staff including 
providing patients/caregivers with a means to make contact with health 
care professionals in the practice to address urgent needs regardless 
of the time of day or day of week. We believed the CPT language more 
accurately reflects the potential role of clinical staff or call-
sharing services in addressing after-hours care needs than our current 
language does. In addition, the 24/7 access would be for ``urgent'' 
needs

[[Page 80248]]

rather than ``urgent chronic care needs,'' because we believed after-
hours services typically would and should address any urgent needs and 
not only those explicitly related to the beneficiary's chronic 
conditions.
    We recognized that health information systems that include remote 
access to the care plan or the full EHR after hours, or a feedback loop 
that communicates back to the primary care physician and others 
involved in the beneficiary's care regarding after-hours care or advice 
provided, are extremely helpful (http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/#CR25). They help ensure that the beneficiary 
receives necessary follow up, particularly if he or she is referred to 
the emergency department, and follow up after an emergency department 
visit is required under the CCM element of Management of Care 
Transitions. Accordingly, we continued to support and encourage the use 
of interoperable EHRs or remote access to the care plan in providing 
the CCM service elements of 24/7 Access to Care, Continuity of Care, 
and Management of Care Transitions. However, adoption of such 
technology would be optimal not only for CCM services, but also for a 
number of other PFS services and procedures (including various other 
care management services), and we have not required adoption of any 
certified or non-certified health information technology as a condition 
of payment for any other PFS service. We noted that there are 
incentives under other Medicare programs to adopt such information 
technology, and were concerned that imposing too many EHR-related 
requirements at the service level as a condition of PFS payment could 
create disparities between these services and others under the fee 
schedule. Lastly, we recognized that not all after-hours care warrants 
follow-up or a feedback loop with the practitioner managing the 
beneficiary's care overall, and that under particular circumstances 
feedback loops can be achieved through oral, telephone or other less 
sophisticated communication methods. Therefore, we proposed to remove 
the requirement that the individuals providing CCM after hours must 
have access to the electronic care plan.
    This proposal reflected our understanding that flexibility in how 
practices can provide the requisite 24/7 access to care, as well as 
continuity of care and management of care transitions, for their CCM 
patients could facilitate appropriate access to these services for 
Medicare beneficiaries. This proposal was not intended to undermine the 
significance of standardized communication methods as part of effective 
care. Instead, we recognized that other CMS initiatives (such as MIPS 
and APMs under the Quality Payment Program) may be better mechanisms to 
incentivize increased interoperability of health information systems 
than conditions of payment assigned to particular services under the 
PFS. We also anticipated that improved accuracy of payment for care 
management services and reduced administrative burden associated with 
billing for them would contribute to practitioners' capacity to invest 
in the best tools for managing the care of Medicare beneficiaries.
    For Continuity of Care, we currently require the ability to obtain 
successive routine appointments ``with the practitioner or a designated 
member of the care team,'' while CPT only references successive routine 
appointments ``with a designated member of the care team.'' We do not 
believe there is any practical difference between these two phrases and 
therefore proposed to omit the words ``practitioner or'' from our 
requirement. The billing practitioner is a member of the CCM care team, 
so the CPT language already allows for successive routine appointments 
either with the billing practitioner or another appropriate member of 
the CCM care team.
    Based on review of extensive public comment and stakeholder 
feedback, we had also come to believe that we should not require 
individuals providing the beneficiary with the required 24/7 access to 
care for urgent needs to have access to the care plan as a condition of 
CCM payment. As discussed above, we believed that in general, provision 
of effective after-hours care of the beneficiary would require access 
to the care plan, if not the full EHR. However, we have heard from 
rural and other practices that remote access to the care plan is not 
always necessary or possible because urgent care needs after-hours are 
often referred to a practitioner or care team member who established 
the care plan or is familiar with the beneficiary. In some instances, 
the care plan does not need to be available to address urgent patient 
needs after business hours. In addition, we have not required the use 
of any certified or non-certified health information technology in the 
provision of any other PFS services (including various other care 
management services). We were concerned that imposing EHR-related 
requirements at the service level as a condition of PFS payment could 
distort the relative valuation of services priced under the fee 
schedule. Therefore, we proposed to change the CCM service element to 
require timely electronic sharing of care plan information within and 
outside the billing practice, but not necessarily on a 24/7 basis, and 
to allow transmission of the care plan by fax.
    We acknowledged that it is best for practitioners and providers to 
have access to care plan information any time they are providing 
services to beneficiaries who require CCM services. This proposal was 
not intended to undermine the significance of electronic communication 
methods other than fax transmission in providing effective, continuous 
care. On the contrary, we believed that fax transmission, while 
commonly used, is much less efficient and secure than other methods of 
communicating patient health information, and we encouraged 
practitioners to adopt and use electronic technologies other than fax 
for transmission and exchange of the CCM care plan. We continued to 
believe the best means of exchange of all relevant patient health 
information is through standardized electronic means. However, we 
recognized that other CMS initiatives (such as MIPS and APMs under the 
Quality Payment Program) may be better mechanisms to incentivize 
increased interoperability of health information systems than 
conditions of payment assigned to particular services under the PFS. We 
believed our proposal would still allow timely availability of health 
information within and outside the practice for purposes of providing 
CCM, and would simplify the rules governing provision of the service 
and improve access to the service. The proposed revisions would better 
align the service with appropriate CPT prefatory language, which may 
reduce unnecessary administrative complexity for practitioners in 
navigating the differences between CPT guidance and Medicare rules.
    The CCM scope of service element Management of Care Transitions 
includes a requirement for the creation and electronic transmission and 
exchange of continuity of care documents referred to as ``clinical 
summaries'' (see Table 11 of the CY 2017 PFS proposed rule). We 
patterned our requirements regarding clinical summaries after the EHR 
Incentive Program requirement that an eligible professional who 
transitions their patient to another setting of care or provider of 
care, or refers their patient to another provider of care, should 
provide a summary care record for each transition of care or referral. 
This clinical summary includes demographics, the medication list, 
medication allergy list, problem list, and a number of other data 
elements if the

[[Page 80249]]

practitioner knows them. As a condition of CCM payment, we required 
standardized content for clinical summaries (that they must be created/
formatted according to certified EHR technology). For the exchange/
transport function, we did not require the use of a specific tool or 
service to exchange/transmit clinical summaries, as long as they are 
transmitted electronically (this can include fax only when the 
receiving practitioner or provider can only receive by fax).
    Based on review of extensive public comment and stakeholder 
feedback, we had come to believe that we should not require the use of 
any specific electronic technology in managing a beneficiary's care 
transitions as a condition of payment for CCM services. Instead, we 
proposed more simply to require the billing practitioner to create and 
exchange/transmit continuity of care document(s) timely with other 
practitioners and providers. To avoid confusion with the requirements 
of the EHR Incentive Programs, and since we would no longer require 
standardized content for the CCM continuity of care document(s), we 
would refer to them as continuity of care documents instead of clinical 
summaries. We would no longer specify how the billing practitioner must 
transport or exchange these document(s), as long as it is done timely 
and consistent with the Care Transitions Management scope of service 
element. We welcomed public input on how we should refer to these 
document(s), noting that CPT does not provide model language specific 
to CCM services. The proposed term ``continuity of care document(s)'' 
draws on CPT prefatory language for TCM services, which CPT provides 
may include ``obtaining and reviewing the discharge information (for 
example, discharge summary, as available, or continuity of care 
document).''
    Again, this proposal was not intended to undermine the significance 
of a standardized, electronic format and means of exchange (other than 
fax) of all relevant patient health information, for achieving timely, 
seamless care across settings especially after discharge from a 
facility. On the contrary, we believed that fax transmission, while 
commonly used, is much less efficient and secure than other methods of 
communicating patient health information, and we encourage 
practitioners to adopt and use electronic technologies other than fax 
for transmission and exchange of continuity of care documents in 
providing CCM services. We continued to believe the best means of 
exchange of all relevant patient health information is through 
standardized electronic means. However, as we discussed above regarding 
the CCM care plan, we have not applied similar requirements to other 
PFS services specifically (including various other care management 
services) and had concerns about how doing so may create disparities 
between these services and others under the PFS. We also recognized 
that other CMS initiatives (such as MIPS and APMs under the Quality 
Payment Program) may be better mechanisms to incentivize increased 
interoperability of health information systems than conditions of 
payment assigned to particular services under the PFS.
    Comment: Most of the commenters supported our proposed revisions to 
the health IT use requirements for billing the CCM code. They shared 
CMS' goal of interoperability but believed the changes were necessary 
to improve CCM uptake. Some commenters favored hardship exceptions or 
rural or small practice exceptions instead of changes to the current 
requirements that would apply to all practitioners alike. Some 
commenters expressed particular concern about relaxing the current 
rules in instances where CCM outsourcing reduces clinical integration. 
These commenters noted that CCM is commonly outsourced to third party 
companies that provide remote care management services (including after 
hours) via telephone and online contact only, using staff who have no 
established relationship with the beneficiary or other members of the 
care team and have no interaction with the office staff and physicians 
other than electronic communication. These commenters were concerned 
that our proposed changes to the health IT requirements for CCM payment 
would result in little to no oversight or guidance of the third party, 
and recommended that CMS make the proposed changes cautiously. One of 
these commenters recommended in addition that CMS should seek to 
increase access to CCM services and reduce administrative burden by 
pursuing alignment between the provision of CCM and other programs and 
incentives, such as the Quality Payment Program. Other commenters 
recommended further reduction in payment rules, such as removing all 
requirements to use a certified EHR, or movement away from timed codes 
that require documentation in short time increments and disrupt 
workflow.
    Response: We continue to believe that other Medicare initiatives 
and programs (such as MIPS and APMs under the Quality Payment Program) 
are better suited to advance use of interoperable health IT systems 
than establishing code-level conditions of payment, unique to CCM or 
other primary care or cognitive services. We also believe that a 
hardship, rural or small practice exception would greatly increase 
rather than decrease administrative complexity for practitioners and 
CMS, and CCM uptake has been relatively high among solo practices. We 
believe that reducing code-level conditions of payment is necessary to 
improve beneficiary access to appropriate CCM services. Therefore, we 
are finalizing revisions to the CCM scope of service elements as 
proposed.
    However, we appreciate the commenters' feedback that relaxing the 
health IT use requirements may be of particular concern in situations 
where CCM is outsourced to a third party, reducing clinical 
integration. As we discuss in the section of this final rule on BHI 
services (section II.E.3.b), health IT holds significant promise for 
remote connectivity and interoperability that may assist and be useful 
(if not necessary) for reducing care fragmentation. However, we agree 
that remote provision of services by entities having only a loose 
association with the treating practitioner can detract from continuous, 
patient-centered care, whether or not those entities employ certified 
or other electronic technology. We will continue to consider the 
potential impacts of remote provision of CCM and similar types of 
services by third parties. We wish to emphasize for CCM, as we did for 
BHI services, that while the CCM codes do not explicitly count time 
spent by the billing practitioner, they are valued to include work 
performed by the billing practitioner, especially complex CCM. We 
emphasize that the practitioner billing for CCM must remain involved in 
ongoing oversight, management, collaboration and reassessment as 
appropriate to bill CCM services. If there is little oversight by the 
billing practitioner or a lack of clinical integration between a third 
party providing CCM and the billing practitioner, we do not believe 
that the CCM service elements are actually being furnished and 
therefore, in such cases, the practitioner should not bill for CCM.
    Finally, we note that activities undertaken as part of 
participation in MIPS or an APM under the Quality Payment Program may 
support the ability of a practitioner to meet our final requirements 
for the continuity of care document(s) and the electronic care plan.
    Comment: Several commenters recommended that we define the proposed 
term ``timely'' for the creation and transmission of care plan and care

[[Page 80250]]

transitions health information. Several commenters believed that 
``timely'' implies a time period of 30 to 90 days, or believed some 
third party vendors would interpret the term in this manner.
    Response: Our proposal of the term ``timely'' originated from the 
use of this term in the CPT prefatory language for Care Management 
services, which includes, for example, ``provide timely access and 
management for follow-up after an emergency department visit'' and 
``timely access to clinical information.'' We do not believe we should 
specify a timeframe, because it would vary for individual patients and 
CCM service elements, we are not aware of any clinical standards 
referencing specific times, and we are seeking to allow appropriate 
flexibility in how CCM is furnished. We note that dictionary meanings 
of the term ``timely'' include quickly; soon; promptly; occurring at a 
suitable time; done or occurring at a favorable or useful time; 
opportune. ``Timely'' does not necessarily imply speed, and means doing 
something at the most appropriate moment. Therefore we believe 
``timely'' is an appropriate term to use to govern how quickly the 
health information in question is transmitted or available. We note 
that even the current requirements for use of specific electronic 
technology do not necessarily impact how quickly the health information 
in question is used to inform care, and addition of the word ``timely'' 
implies more regarding actual use of the information. We are monitoring 
CCM uptake and diffusion through claims analysis and are pursuing 
claims-based outcomes analyses, to help inform whether the service is 
being provided as intended and improving health outcomes. We believe 
these evaluation activities will help us assess moving forward whether 
health information is being shared or made available timely enough 
under our revised CCM payment policies.
    As we stated in the CY 2017 proposed rule, the policy changes for 
CCM health IT use are not intended to undermine the importance of 
interoperability or electronic data exchange. These changes are driven 
by concerns that we have not applied similar requirements to other PFS 
services specifically, including various other care management 
services, and that such requirements create disparities between CCM 
services and other PFS services. We believe that other CMS initiatives 
may be better mechanisms to incentivize increased use and 
interoperability of health information systems than conditions of 
payment assigned to particular services under the PFS. We anticipate 
that these CCM policy changes will improve practitioners' capacity to 
invest in the best tools for managing the care of Medicare 
beneficiaries.
c. Beneficiary Receipt of Care Plan
    We proposed to simplify the current requirement to provide the 
beneficiary with a written or electronic copy of the care plan, by 
instead adopting the CPT language specifying more simply that a copy of 
the care plan must be given to the patient or caregiver. While we 
believe beneficiaries should and must be provided a copy of the care 
plan, and that practitioners may choose to provide the care plan in 
hard copy or electronic form in accordance with patient preferences, we 
do not believe it is necessary to specify the format of the care plan 
that must be provided as a condition of CCM payment. Additionally, we 
recognize that there may be times that sharing the care plan with the 
caregiver (in a manner consistent with applicable privacy and security 
rules and regulations) may be appropriate.
    Comment: The commenters who provided comments on this particular 
proposal were supportive of it. In particular, several commenters 
expressed appreciation for appropriate inclusion of caregivers.
    Response: We thank the commenters for their support and are 
finalizing as proposed.
d. Beneficiary Consent
    We continue to believe that obtaining advance beneficiary consent 
to receive CCM services is important to ensure the beneficiary is 
informed, educated about CCM services, and is aware of applicable cost 
sharing. We also believe that querying the beneficiary about whether 
another practitioner is already providing CCM services helps to reduce 
the potential for duplicate provision or billing of the services. 
However, we believe the consent process could be simplified, and that 
it should be left to the practitioner and the beneficiary to decide the 
best way to establish consent. Therefore, we proposed to continue to 
require billing practitioners to inform the beneficiary of the 
currently required information (that is, inform the beneficiary of the 
availability of CCM services; inform the beneficiary that only one 
practitioner can furnish and be paid for these services during a 
calendar month; and inform the beneficiary of the right to stop the CCM 
services at any time (effective at the end of the calendar month)). 
However, we proposed to specify that the practitioner could document in 
the beneficiary's medical record that this information was explained 
and note whether the beneficiary accepted or declined CCM services 
instead of obtaining a written agreement.
    We also proposed to remove the language requiring beneficiary 
authorization for the electronic communication of his or her medical 
information with other treating providers as a condition of payment for 
CCM services, because under federal regulations that implement the 
Health Insurance Portability and Accountability Act (HIPAA) Privacy 
Rule (45 CFR 164.506), a covered entity is permitted to use or disclose 
protected health information for purposes of treatment without patient 
authorization. Moreover, if such disclosure is electronic, the HIPAA 
Security Rule requires secure transmission (45 CFR 164.312(e)). In 
previous regulations we have reminded practitioners that for all 
electronic sharing of beneficiary information in the provision of CCM 
services, HIPAA Privacy and Security Rule standards apply in the usual 
manner (79 FR 67728).
    Comment: The commenters were largely supportive of our proposed 
policy changes. The commenters were supportive of verbal instead of 
written beneficiary consent if a clear requirement remains to 
transparently inform the beneficiary about the nature and benefit of 
the services, applicable cost sharing, and document that this 
information was conveyed; current written agreements qualify; and 
practitioners can elect to obtain written consent. Some commenters 
believed that obtaining written consent might be preferable as a means 
of resolving who is eligible for payment, if more than one practitioner 
bills. A few commenters suggested CMS require written educational 
materials about CCM, or conduct beneficiary outreach and education.
    Response: We appreciate the commenters' support and 
recommendations. We are finalizing changes to the beneficiary consent 
requirements as proposed and clarifying that a clear requirement 
remains to transparently inform the beneficiary about the nature and 
benefit of the services, applicable cost sharing, and to document that 
this information was conveyed. The final beneficiary consent 
requirements do not affect any written agreements that are already in 
place for CCM services, and we note that practitioners can still elect 
to obtain written consent rather than verbal consent.
e. Documentation
    We have heard from practitioners that the requirements to document 
certain

[[Page 80251]]

information in a certified EHR format are redundant because the CCM 
billing rules already require documentation of core clinical 
information in a certified EHR format. Specifically, we already require 
structured recording of demographics, problems, medications and 
medication allergies, and the creation of a clinical summary record, 
using a qualifying certified EHR; and that a full list of problems, 
medications and medication allergies in the EHR must inform the care 
plan, care coordination and ongoing clinical care. Therefore, we 
proposed to no longer specify the use of a qualifying certified EHR to 
document communication to and from home- and community-based providers 
regarding the patient's psychosocial needs and functional deficits and 
to document beneficiary consent. We would continue to require 
documentation in the medical record of beneficiary consent (discussed 
above) and of communication to and from home- and community-based 
providers regarding the patient's psychosocial needs and functional 
deficits.
    Comment: Many commenters were supportive of these proposals.
    Response: We thank the commenters for their support and are 
finalizing changes to the documentation requirements as proposed. We 
continue to encourage practitioners to utilize health IT solutions for 
obtaining and documenting health information from sources external to 
their practice, noting that the 2015 edition of ONC certification 
criteria (see 80 FR 62601) includes criteria which specifically relate 
to obtaining information from non-clinical sources and the capture of 
structured data relating to social, psychological, and behavioral 
attributes.
f. Summary of Final CCM Policies
    We are finalizing changes to the CCM scope of service elements 
discussed above that will apply for both complex and non-complex CCM 
services beginning in CY 2017. The final CY 2017 service elements for 
CCM are summarized in Table 11. We believe these changes will retain 
elements of the CCM service that are characteristic of the changes in 
medical practice toward advanced primary care, while eliminating 
redundancy, simplifying provision of the services, and improving access 
to the services. For payment of complex CCM services beginning in CY 
2017, we are adopting the CPT code descriptors for CPT codes 99487 and 
99489 as well as the service elements in Table 11. We are providing 
separate payment for complex CCM (CPT 99487, 99489) using the RUC-
recommended payment inputs for those services. We may reconsider the 
role of health information technology in CCM service provision in 
future years. We anticipate that improved accuracy of payment for CCM 
services, and reduced administrative burden associated with billing CCM 
services, will contribute to practitioners' capacity to invest in the 
best tools for managing the care of Medicare beneficiaries.

  Table 11--Summary of CY 2017 Chronic Care Management Service Elements
                        and Billing Requirements
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Initiating Visit--Initiation during an AWV, IPPE, or face-to-face E/M
 visit (Level 4 or 5 visit not required), for new patients or patients
 not seen within 1 year prior to the commencement of chronic care
 management (CCM) services............................................
Structured Recording of Patient Information Using Certified EHR
 Technology--Structured recording of demographics, problems,
 medications and medication allergies using certified EHR technology.
 A full list of problems, medications and medication allergies in the
 EHR must inform the care plan, care coordination and ongoing clinical
 care.................................................................
24/7 Access & Continuity of Care:
     Provide 24/7 access to physicians or other qualified
     health care professionals or clinical staff including providing
     patients/caregivers with a means to make contact with health care
     professionals in the practice to address urgent needs regardless
     of the time of day or day of week................................
     Continuity of care with a designated member of the care
     team with whom the beneficiary is able to schedule successive
     routine appointments.............................................
Comprehensive Care Management--Care management for chronic conditions
 including systematic assessment of the beneficiary's medical,
 functional, and psychosocial needs; system-based approaches to ensure
 timely receipt of all recommended preventive care services;
 medication reconciliation with review of adherence and potential
 interactions; and oversight of beneficiary self-management of
 medications..........................................................
Comprehensive Care Plan:
     Creation, revision and/or monitoring (as per code
     descriptors) of an electronic patient-centered care plan based on
     a physical, mental, cognitive, psychosocial, functional and
     environmental (re)assessment and an inventory of resources and
     supports; a comprehensive care plan for all health issues........
     Must at least electronically capture care plan
     information, and make this information available timely within
     and outside the billing practice as appropriate. Share care plan
     information electronically (can include fax) and timely within
     and outside the billing practice to individuals involved in the
     beneficiary's care...............................................
     A copy of the plan of care must be given to the patient
     and/or caregiver.................................................
Management of Care Transitions:
     Management of care transitions between and among health
     care providers and settings, including referrals to other
     clinicians; follow-up after an emergency department visit; and
     follow-up after discharges from hospitals, skilled nursing
     facilities or other health care facilities.......................
     Create and exchange/transmit continuity of care
     document(s) timely with other practitioners and providers........
Home- and Community-Based Care Coordination:
     Coordination with home and community based clinical
     service providers................................................
     Communication to and from home- and community-based
     providers regarding the patient's psychosocial needs and
     functional deficits must be documented in the patient's medical
     record...........................................................
Enhanced Communication Opportunities--Enhanced opportunities for the
 beneficiary and any caregiver to communicate with the practitioner
 regarding the beneficiary's care through not only telephone access,
 but also through the use of secure messaging, Internet, or other
 asynchronous non-face-to-face consultation methods...................
Beneficiary Consent:
     Inform the beneficiary of the availability of CCM
     services; that only one practitioner can furnish and be paid for
     these services during a calendar month; and of their right to
     stop the CCM services at any time (effective at the end of the
     calendar month)..................................................
     Document in the beneficiary's medical record that the
     required information was explained and whether the beneficiary
     accepted or declined the services................................
Medical Decision-Making--Complex CCM services require and include
 medical decision-making of moderate to high complexity (by the
 physician or other billing practitioner).............................
------------------------------------------------------------------------


[[Page 80252]]

5. Assessment and Care Planning for Patients with Cognitive Impairment 
(GPPP6)
    For CY 2017 we proposed a G-code that would provide separate 
payment to recognize the work of a physician (or other appropriate 
billing practitioner) in assessing and creating a care plan for 
beneficiaries with cognitive impairment, such as from Alzheimer's 
disease or dementia, at any stage of impairment, G0505 (Cognition and 
functional assessment using standardized instruments with development 
of recorded care plan for the patient with cognitive impairment, 
history obtained from patient and/or caregiver, in office or other 
outpatient setting or home or domiciliary or rest home). We understand 
that a similar code was recently approved by the CPT Editorial Panel 
and is scheduled to be included in the CY 2018 CPT code set. We 
intended for G0505 to be a temporary code, perhaps for only one year, 
to be replaced by the CPT code in CT 2018. We will consider whether to 
adopt and establish relative value units for the new CPT code under our 
standard process, presumably for CY 2018.
    We reviewed the list of service elements that were considered by 
the CPT Editorial Panel, and proposed the following as required service 
elements of G0505:
     Cognition-focused evaluation including a pertinent history 
and examination.
     Medical decision making of moderate or high complexity 
(defined by the E/M guidelines).
     Functional assessment (for example, Basic and Instrumental 
Activities of Daily Living), including decision-making capacity.
     Use of standardized instruments to stage dementia.
     Medication reconciliation and review for high-risk 
medications, if applicable.
     Evaluation for neuropsychiatric and behavioral symptoms, 
including depression, including use of standardized instrument(s).
     Evaluation of safety (for example, home), including motor 
vehicle operation, if applicable.
     Identification of caregiver(s), caregiver knowledge, 
caregiver needs, social supports, and the willingness of caregiver to 
take on caregiving tasks.
     Advance care planning and addressing palliative care 
needs, if applicable and consistent with beneficiary preference.
     Creation of a care plan, including initial plans to 
address any neuropsychiatric symptoms and referral to community 
resources as needed (for example, adult day programs, support groups); 
care plan shared with the patient and/or caregiver with initial 
education and support.
    The proposed valuation of G0505 (discussed in section II.E.1) 
assumed that this code would include services that are personally 
performed by the physician (or other appropriate billing practitioner, 
such as a nurse practitioner or physician assistant) and would 
significantly overlap with services described by certain E/M visit 
codes, advance care planning services, and certain psychological or 
psychiatric service codes that are currently separately payable under 
the PFS. Accordingly, we proposed that G0505 must be furnished by the 
physician (or other appropriate billing practitioner) and could not be 
billed on the same date of service as CPT codes 90785 (Psytx complex 
interactive), 90791 (Psych diagnostic evaluation), 90792 (Psych diag 
eval w/med srvcs), 96103 (Psycho testing admin by comp), 96120 
(Neuropsych tst admin w/comp), 96127 (Brief emotional/behav assmt), 
99201-99215 (Office/outpatient visits new), 99324-99337 (Domicil/r-home 
visits new pat), 99341-99350 (Home visits new patient), 99366-99368 
(Team conf w/pat by hc prof), 99497 (Advncd care plan 30 min), 99498 
(Advncd care plan addl 30 min)), since these codes all reflect face-to-
face services furnished by the physician or other billing practitioner 
for related separately billable services that overlap substantially 
with G0505. In addition, we proposed to prohibit billing of G0505 with 
other care planning services, such as care plan oversight services (CPT 
code 99374), home health care and hospice supervision (G0181, G0182), 
or our proposed add-on code for comprehensive assessment and care 
planning by the billing practitioner for patients requiring CCM 
services (GPPP7). We solicited comment on whether there are 
circumstances where multiple care planning codes could be furnished 
without significant overlap. We proposed to specify that G0505 may 
serve as a companion or primary E/M code to the prolonged service codes 
(those that are currently separately paid, and those we proposed to 
separately pay beginning in 2017), but were interested in public input 
on whether there is any overlap among these services. We solicited 
comment on how to best delineate the post-service work for G0505 from 
the work necessary to provide the prolonged services code.
    We did not believe the services described by G0505 would 
significantly overlap with proposed or current medically necessary CCM 
services (CPT codes 99487, 99489, 99490); TCM services (CPT codes 
99495, 99496); or the proposed behavioral health integration service 
codes (HCPCS codes GPPP1, GPPP2, GPPP3, GPPPX). Therefore, we proposed 
that G0505 could be billed on the same date-of-service or within the 
same service period as these codes (CPT codes 99487, 99489, 99490, 
99495, 99496, and HCPCS codes GPPP1, GPPP2, GPPP3, and GPPPX). There 
may be overlap in the patient population eligible to receive these 
services and the population eligible to receive the services described 
by G0505, but we believed there would be sufficient differences in the 
nature and extent of the assessments, interventions and care planning, 
as well as the qualifications of individuals providing the services, to 
allow concurrent billing for services that are medically reasonable and 
necessary. We solicited public comment on potential overlap between 
G0505 and other codes currently paid under the PFS, as well as the 
other primary care/cognitive services addressed in this section of the 
final rule.
    Comment: Many commenters were supportive of the proposal, including 
the provisions regarding scope of service elements, conditions of 
payment, and overlap with other services under the PFS.
    Response: We thank commenters for their support of the proposed 
scope of service, conditions of payment, and overlap with other 
services under the PFS for G0505. We believe that by improving payment 
accuracy by paying separately for this service, practitioners will be 
able to accurately assess patients for cognitive impairment, 
particularly in early stages.
    Comment: We received numerous comments stating that assessment and 
staging for dementia is very sensitive and should only be conducted by 
neuropsychologists, who would be unable to bill G0505. Commenters were 
concerned that untrained professionals conducting assessments for 
dementia would lead to errors in diagnosis and inappropriate treatment. 
Commenters encouraged CMS to not finalize this code and maintain the 
current coding for psychological and neuropsychological assessment or 
suggested that CMS remove the bullet points associated with medication 
management or medical decision making so that G0505 could be billed by 
psychologists.
    Response: While we acknowledge and support the work of 
psychologists and neuropsychologists in the care of Medicare 
beneficiaries, we continue to

[[Page 80253]]

believe that this code describes a distinct PFS service that may be 
reasonable and necessary in the diagnosis and treatment of a 
beneficiary's illness. We remind interested stakeholders that we 
routinely examine the valuation and coding for existing services under 
the potentially misvalued code initiative, and that there is a the 
process for public nomination of particular codes. If stakeholders have 
information to suggest that the current coding for neuropsychological 
and psychological testing is inaccurate, we welcome nominations under 
the established process.
    Comment: A few commenters encouraged CMS to avoid adopting scope of 
service elements that are exhaustive as these may create barriers to 
utilization, while other commenters made the following recommendations 
regarding the scope of service provisions:
     Expand scope of service elements related to medication 
management.
     Include occupational therapy in the scope of service 
element pertaining to community resources.
     Rewrite ``Creation of a care plan, including initial plans 
to address any neuropsychiatric symptoms and referral to community 
resources as needed (for example, adult day programs, support groups); 
care plan shared with the patient and/or caregiver with initial 
education and support'' to include ``identification of caregiver(s), 
caregiver knowledge, caregiver needs, social supports, and the 
willingness and availability of caregiver to voluntarily take on 
caregiving tasks.''
     Make sure that non-paid or informal caregivers are 
included in care planning and provide resources and support for care 
givers so as to improve care givers ability to provide care for the 
beneficiary.
     Require the inclusion of caregiver names in care plan and 
patients medical record, require that caregivers be assessed for stress 
and depressive symptoms, as well as care giver skill and education 
needs.
     State that consultations with the caregiver are 
permissible under HIPAA and that such conversations may be necessary in 
the development of a care plan.
     Specify that any advance care planning is consistent with 
beneficiary preference and addresses any palliative care needs of the 
patient, and include establishment of durable power of attorney.
     Clarify that diagnosis of dementia is not part of the 
scope of service by deleting ``cognition focused evaluation including 
pertinent history'' from the scope of service.
     Clarify that ``functional assessment'' is separate from 
decision making assessments, and that this is a non-legal assessment of 
competency.
     Stipulate that other decision makers should be identified.
     Consider deleting ``use of standardized instruments to 
stage dementia'' because the care plan is the most important aspect of 
the service and many standardized instruments are not very effective at 
staging.
     Clarify that the care plan address both medical and non-
medical issues, and includes follow-up scheduling for monitoring and 
evaluation.
     Provide a copy of the written care plan to the patient.
     Refer to the care plan as a ``person-centered care plan.''
     Include evaluation of medical problems including review of 
lab or imaging tests, review of co-morbidities, especially those which 
are dependent on self-care, evaluation the risk of falls and 
recommendations for fall prevention, evaluation of possible elder 
abuse, and documentation of financial issues, as part of the scope of 
service.
    Response: We appreciate the information provided by commenters on 
the best practices associated with furnishing this service and would 
encourage stakeholders to adopt any or all of these scope of service 
provisions, such as the inclusion of caregivers in care planning. The 
scope of service for assessment and care planning service for patients 
with cognitive impairment does not prohibit stakeholders from adopting 
any additional scope of service provisions which may be beneficial for 
the treatment of the patient. However, we do not believe that the 
ability to fully furnish this service and establish an appropriate 
value for it is contingent on meeting such conditions. Therefore, we do 
not believe they should be added to the scope of service. We concur 
with commenters on the necessity of avoiding the imposition of overly 
burdensome restrictions within the scope of service.
    Comment: Some commenters requested that CMS clarify that not all 
elements in the scope of service need to be provided by the billing 
practitioner and many can be provided by others incident to the billing 
practitioner's services. One commenter stated that there are 
circumstances where the best practitioner to provide a specific service 
element does not work in the same practice as the billing practitioner, 
and therefore the billing practitioner should be able to contract out 
for provision of some aspects, provided that the billing practitioner 
remain in oversight. Other commenters stated that CMS should make G0505 
billable by other practitioners, such as occupational therapists, or 
community based entities.
    Response: G0505 is a service that includes central elements, which 
must be performed by the billing practitioner subject to established E/
M guidelines. Only those practitioners eligible to report E/M services 
should report this service. Outside of the specified elements, the 
regular incident-to rules apply consistent with other E/M services. We 
believe that physicians and eligible non-physician practitioners, such 
as a nurse practitioners and physician assistants should exclusively 
bill for this code.
    Comment: Many commenters suggested that CMS expand HCPCS code G0505 
or pay separately for similar services furnished to patients with other 
advanced or life threatening illnesses.
    Response: We appreciate the comments on other conditions that could 
benefit from assessment and care planning and will consider these for 
future rulemaking. We are finalizing the G0505 code to pay separately 
for the assessment and care plan creation for beneficiaries with 
cognitive impairment, such as from Alzheimer's disease or dementia, at 
any stage of impairment.
    Comment: Commenters provided many examples of how CMS could develop 
appropriate quality and outreach measures to ensure appropriate 
utilization of G0505. Commenters encouraged CMS to closely monitor use 
of G0505 for a few years following implementation, so as to ascertain 
whether patient eligibility is an issue in uptake for the code.
    Response: We appreciate the information on quality and outreach 
measures. CMS is engaged in the use of measures to improve quality and 
access to care. CMS intends to monitor utilization and will consider 
how conditions of payment align with best practices and quality 
measures.
    Comment: One commenter urged CMS to make the proposed coding and 
payment changes available to physicians in total cost of care models, 
such as ACOs and bundled payment programs.
    Response: Our proposal relates only to payment for services under 
the Medicare PFS. We note that the codes and payment amounts that we 
finalize for services will be available for billing and payment under 
the PFS for CY 2017. In general, we do not address in this final rule, 
and instead defer to the policies regarding billing and payment for 
these services that are applicable within individual Center for 
Medicare &

[[Page 80254]]

Medicaid Innovation models and other programs. However, as our policies 
regarding payment for new primary care codes are applicable beginning 
in CY 2017, we note that models may need to update their policies to 
prevent potential duplication of payment between the PFS and the 
models. For example, where CCM services have been excluded from 
separate payment under existing models, newly established care 
management services (including complex CCM, psychiatric CoCM, and BHI) 
may likewise be excluded.
    Comment: One commenter stated that many small practices do not have 
the infrastructure to support a multi-disciplinary team of 
practitioners and urged CMS to allow flexibility for solo and small 
group practices to share resources. The commenter also suggested that 
CMS offer a one-time incentive for practices to integrate service 
elements into workflow. Response: In general, the coding under the PFS 
is intended to describe services as they are furnished and are valued 
using typical resource costs. We appreciate the concern of commenters 
regarding access, and we are eager to hear from stakeholders regarding 
concerns related to access for these and other PFS services.
6. Improving Payment Accuracy for Care of People With Disabilities 
(GDDD1)
    We estimate that about 7 percent of all Medicare beneficiaries have 
a potentially disabling mobility-related diagnosis (the Medicare-only 
prevalence is 5.5 percent and the prevalence for Medicare-Medicaid dual 
eligible beneficiaries is 11 percent), using 2010 Medicare (and for 
dual eligible beneficiaries, Medicaid) claims data.
    When a beneficiary with a mobility-related disability goes to a 
physician or other practitioner's office for an E/M visit, the 
resources associated with providing the visit can exceed the resources 
required for the typical E/M visit. An E/M visit for a patient with a 
mobility-related disability can require more physician and clinical 
staff time to provide appropriate care because the patient may require 
skilled assistance throughout the visit to carefully move and adjust 
his/her body. Furthermore, an E/M visit for a patient with a mobility-
related disability commonly requires specialized equipment such as a 
wheel chair accessible scale, floor and overhead lifts, a movable exam 
table, padded leg supports, a stretcher and transfer board. The current 
E/M visit payment rates, based on an assumption of ``typical'' 
resources involved in furnishing an E/M visit to a ``typical'' patient, 
do not accurately reflect these additional resources associated with 
furnishing appropriate care to many beneficiaries with mobility-related 
disabilities.
    When furnishing E/M services to beneficiaries with mobility-related 
disabilities, practitioners face difficult choices in deciding whether 
to take the extra time necessary and invest in the required specialized 
equipment for these visits even though the payment rate for the service 
does not account for either expense; potentially providing less than 
optimal care for a beneficiary whose needs exceed the standard 
appointment block of time in the standard equipped exam room reflected 
in the current E/M visit payment rate; or declining to accept 
appointments altogether for beneficiaries who require additional time 
and specialized equipment.
    Each of these scenarios is potentially problematic. The first two 
scenarios suggest that the quality of care for this beneficiary 
population might be compromised by assumptions under the PFS regarding 
relative resource costs in furnishing services to this population. The 
third scenario reflects an obvious access problem for these 
beneficiaries. To improve payment accuracy and help ameliorate 
potential disparity in access and quality for beneficiaries with 
mobility-related disabilities, we proposed to create a new add-on G-
code, effective for CY 2017, to describe the additional services 
furnished in conjunction with E/M services to beneficiaries with 
disabilities that impair their mobility:
    G0501: Resource-intensive services for patients for whom the use of 
specialized mobility-assistive technology (such as adjustable height 
chairs or tables, patient lifts, and adjustable padded leg supports) is 
medically necessary and used during the provision of an office/
outpatient evaluation and management service visit (Add-on code, list 
separately in addition to primary procedure).
    Effective January 1, 2017, we proposed that this add-on code could 
be billed with new and established patient office/outpatient E/M codes 
(CPT codes 99201 through 99205, and 99212 through 99215), as well as 
transitional care management codes (CPT codes 99495 and 99496), when 
the additional resources described by the code are medically necessary 
and used in the provision of care. In addition to seeking comment on 
this proposal, we are also sought comment on other HCPCS codes that may 
be appropriate base codes for this proposed add-on code, including 
those describing preventive visits and services. We reminded potential 
commenters that the rationale for this proposal is based in large part 
on the broad use and lack of granularity in coding for E/M services 
relative to other PFS services in conjunction with the additional 
resources used.
    We received many thoughtful comments on this proposal and thank 
commenters for their input. Comments received are summarized below.
    Comment: Most commenters agreed with the proposed rule's statement 
of disability disparities and discussed a variety challenges that 
individuals with disabilities face in accessing the health care system. 
Several of these commenters cited evidence of existing challenges for 
individuals with mobility-related disabilities, including a lack of 
physically accessible equipment within physician offices, barriers to 
communication, and a lack of existing tools to recognize, track, and 
consistently meet specialized needs. Commenters applauded CMS for 
offering a concrete proposal with significant funding to meaningfully 
address this problem and noted that 26 years after passage of the 
Americans with Disabilities Act, it is alarming that physical and 
communication barriers in physicians' and other health care 
professionals' offices still exist across the country. However, some 
commenters suggested that the root cause and scope of these issues are 
not well characterized, and suggested that CMS work with stakeholders 
to conduct additional studies and gain information as to the underlying 
reasons for barriers to access to care and lower quality scores on 
certain measures.
    Generally, commenters noted that they appreciate CMS' efforts to 
address health disparities based on disability, and some then supported 
this proposal as a first step in providing medically necessary services 
to patients with disabilities, while others recommended that CMS not 
finalize the proposal and raised legal, access, and equity concerns.
    Response: We agree with commenters that individuals with 
disabilities face additional barriers to access health care, an issue 
that contributes to widespread disparities in outcomes. We also agree 
with commenters that the underlying reasons for these disparities are 
multifaceted and can include payment challenges, physical accessibility 
and communication barriers, a lack of awareness among health care 
providers in assessing and fully addressing the needs and preferences 
of people with disabilities, and others issues. As a result of all 
these factors, individuals with disabilities can face challenges in 
scheduling appointments, and in

[[Page 80255]]

finding and maintaining a primary care provider, an essential 
foundation for accessing the health system.
    Although there was near universal agreement among commenters 
regarding problems in health care disparities and barriers to access 
among individuals with disabilities, there was disagreement about 
whether establishing payment for code G0501 as proposed was a good 
solution to help solve these problems. While we believe that improving 
the payment accuracy of physicians' services is necessary and 
appropriate, and can help to address the underlying access issues for 
individuals with disabilities, we also acknowledge that implementation 
of new or revised payments can result in unanticipated, and potentially 
undesirable, consequences. Before implementing payment for code G0501, 
we plan to further analyze and address the concerns raised by 
commenters. As such, we are not finalizing payment for code G0501 at 
this time. We appreciate commenters' insights, and our commitment to 
promoting better primary care for people with disabilities remains 
strong. Over the next 6 months we will engage with interested 
beneficiaries, advocates, and practitioners to continue to explore 
improvements in payment accuracy for care of people with disabilities. 
We intend to discuss this issue again in future rulemaking.
    While we are not finalizing separate payment for code G0501 for CY 
2017, we are including the code in the CY 2017 code set as G0501. The 
HCPCS code G0501 will not be payable under the Medicare PFS for CY 
2017, though practitioners will be able to report the code, should they 
be inclined to do so.
a. Soliciting Comment on Other Coding Changes To Improve Payment 
Accuracy for Care of People With Disabilities
    When furnishing care to a beneficiary with a mobility-related 
disability, the current E/M visit payment rates may not fully reflect 
the associated resource costs that are being incurred by practitioners. 
We recognize that there are other populations for which payment 
adjustment may be appropriate. Our proposal regarding beneficiaries 
with mobility-related disabilities reflected the discrete nature of the 
additional resource costs for this population, the clear lack of 
differentiation in resource costs regarding particular kinds of 
frequently-furnished services, and the broad recognition of access 
problems. We recognize that some physician practices may frequently 
furnish services to particular populations for which the relative 
resource costs are similarly systemically undervalued and we sought 
comment regarding other circumstances where these dynamics can be 
discretely observed.
    Comment: Multiple commenters suggested additional coding changes to 
improve payment accuracy for services for people with disabilities. 
Several commenters requested that CMS broaden the scope of G0501 and 
the codes with which it may be billed, for example by allowing G0501 to 
be billed with preventive services, such as the Initial Preventive 
Physical Examination (IPPE) or ``Welcome to Medicare Visit'', the 
Annual Wellness Visit, or other preventive services including those 
that have been assigned a grade of A or B by the United States 
Preventive Services Task Force. One commenter suggested that CMS also 
establish payment for a lower-level, lower payment add-on code for use 
with patients with a mobility-related disability that may not require 
the use of specialized equipment. Commenters also suggested that CMS 
establish certain forms of physician payment incentives, which might 
more effectively address the accessibility needs of individuals with 
disabilities and ultimately reduce healthcare disparities. 
Specifically, one commenter suggested CMS incentivize physicians to 
establish record-keeping to inquire into patients' accessibility and 
accommodation needs, record the needs of their patients, and take 
action to meet those needs over time.
    Response: We thank commenters for their thoughtful responses. We 
reiterate our commitment to addressing disparities for individuals with 
disabilities and advancing health equity, and will continue to explore 
and revisit potential solutions for overcoming these significant 
challenges, including the appropriate changes in payment.
7. Regulation Text
    Our current regulations in 42 CFR 410.26(b) provide for an 
exception to assign general supervision to CCM services (and similarly, 
for the non-face-to-face portion of TCM services), because these are 
generally non-face-to-face care management/care coordination services 
that would commonly be provided by clinical staff when the billing 
practitioner (who is also the supervising practitioner) is not 
physically present; and the CPT codes are comprised solely (or in 
significant part) of non-face-to-face services provided by clinical 
staff. A number of codes that we proposed to establish for separate 
payment in CY 2017 under our initiative to improve payment accuracy for 
primary care and care management are similar to CCM services, in that a 
critical element of the services is non-face-to-face care management/
care coordination services provided by clinical staff or other 
qualified individuals when the billing practitioner may not be 
physically present. Accordingly, we proposed to amend 42 CFR 
410.26(a)(3) and 410.26(b) to better define general supervision and to 
assign general supervision not only to CCM services and the non-face-
to-face portion of TCM services, but also to proposed codes G0502, 
G0503, G0504, G0507, CPT code 99487, and CPT code 99489. Instead of 
adding each of these proposed codes assigned general supervision to the 
regulation text on an individual basis, we proposed to revise our 
regulation under 42 CFR 410.26(b)(1) to assign general supervision to 
the non-face-to-face portion of designated care management services, 
and we would designate the applicable services through notice and 
comment rulemaking.
    We did not receive any public comments on our proposed regulation 
text. However we received a number of comments regarding a related 
proposal to require behavioral health care managers to be located on 
site. Also for psychiatric CoCM services (G0502, G0503 and G0504), we 
are finalizing a requirement that the behavioral health care manager is 
available to perform his or her duties face-to-face and non-face-to-
face with the beneficiary. We address these issues at length in the BHI 
section of this final rule (section II.E.3). Since we are assigning 
general supervision to psychiatric CoCM behavioral health care manager 
services that may be provided face-to-face with the beneficiary, we are 
omitting the phrase ``non-face-to-face portion of'' in ``the non-face-
to-face portion of designated care management services.'' Accordingly, 
the final amended regulation text in 42 CFR 410.26(b) assigns general 
supervision to ``designated care management services'' that we will 
designate through notice and comment rulemaking. The services that we 
are newly designating (finalizing) for general supervision in this 
final rule are G0502, G0503, G0504, G0507, CPT code 99487 and CPT code 
99489. We had initially proposed adding a cross-reference to the 
existing definition of ``general supervision'' in current regulations 
at Sec.  410.32(b)(3)(i), but to better describe general supervision in 
the context of these services, we are specifying at Sec.  410.26(a)(3) 
that general supervision means the service is furnished under the 
physician's (or other practitioner's)

[[Page 80256]]

overall direction and control, but the physician's (or other 
practitioner's) presence is not required during the performance of the 
service. At Sec.  410.26(b)(5), we specify that, in general, services 
and supplies must be furnished under the direct supervision of the 
physician (or other practitioner). Designated care management services 
can be furnished under general supervision of the physician (or other 
practitioner) when these services or supplies are provided incident to 
the services of a physician (or other practitioner). The physician (or 
other practitioner) supervising the auxiliary personnel need not be the 
same physician (or other practitioner) who is treating the patient more 
broadly. However, only the supervising physician (or other 
practitioner) may bill Medicare for incident to services.
8. CCM Requirements for Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs).
    RHCs and FQHCs have been authorized to bill for CCM services since 
January 1, 2016, and are paid based on the Medicare PFS national 
average non-facility payment rate when CPT code 99490 is billed alone 
or with other payable services on a RHC or FQHC claim. The RHC and FQHC 
requirements for billing CCM services have generally followed the 
requirements for practitioners billing under the PFS, with some 
adaptations based on the RHC and FQHC payment methodologies.
    To assure that CCM requirements for RHCs and FQHCs are not more 
burdensome than those for practitioners billing under the PFS, we 
proposed revisions for CCM services furnished by RHCs and FQHCs similar 
to the revisions proposed under the section above entitled, ``Reducing 
Administrative Burden and Improving Payment Accuracy for Chronic Care 
Management (CCM) Services'' for RHCs and FQHCs. Specifically, we 
proposed to:
     Require that CCM be initiated during an AWV, IPPE, or 
comprehensive E/M visit only for new patients or patients not seen 
within one year. This would replace the requirement that CCM could only 
be initiated during an AWV, IPPE, or comprehensive E/M visit where CCM 
services were discussed.
     Require 24/7 access to a RHC or FQHC practitioner or 
auxiliary personnel with a means to make contact with a RHC or FQHC 
practitioner to address urgent health care needs regardless of the time 
of day or day of week. This would replace the requirement that CCM 
services be available 24/7 with health care practitioners in the RHC or 
FQHC who have access to the patient's electronic care plan to address 
his or her urgent chronic care needs, regardless of the time of day or 
day of the week.
     Require timely electronic sharing of care plan information 
within and outside the RHC or FQHC, but not necessarily on a 24/7 
basis, and expands the circumstances under which transmission of the 
care plan by fax is allowed. This would replace the requirement that 
the electronic care plan be available on a 24/7 basis to all 
practitioners within the RHC or FQHC whose time counts towards the time 
requirement for the practice to bill the CCM code, and removes the 
restriction on allowing the care plan to be faxed only when the 
receiving practitioner or provider can only receive clinical summaries 
by fax.
     Require that in managing care transitions, the RHC or FQHC 
creates, exchanges, and transmits continuity of care document(s) in a 
timely manner with other practitioners and providers. This would 
replace the requirements that clinical summaries must be created and 
formatted according to certified EHR technology, and the requirement 
for electronic exchange of clinical summaries by a means other than 
fax.
     Require that a copy of the care plan be given to the 
patient or caregiver. This would remove the description of the format 
(written or electronic) and allows the care plan to be provided to the 
caregiver when appropriate (and in a manner consistent with applicable 
privacy and security rules and regulations).
     Require that the RHC or FQHC practitioner documents in the 
beneficiary's medical record that all the elements of beneficiary 
consent (for example, that the beneficiary was informed of the 
availability of CCM services; only one practitioner can furnish and be 
paid for these services during a calendar month; the beneficiary may 
stop the CCM services at any time, effective at the end of the calendar 
month, etc.) were provided, and whether the beneficiary accepted or 
declined CCM services. This would replace the requirement that RHCs and 
FQHCs obtain a written agreement that these elements were discussed, 
and removes the requirement that the beneficiary provide authorization 
for the electronic communication of his or her medical information with 
other treating providers as a condition of payment for CCM services.
     Require that communication to and from home- and 
community-based providers regarding the patient's psychosocial needs 
and functional deficits be documented in the patient's medical record. 
This would replace the requirement to document this patient health 
information in a certified EHR format.
    We noted that we did not propose an additional payment adjustment 
for patients who require extensive assessment and care planning as part 
of the initiating visit, as payments for RHC and FQHC services are not 
adjusted for length or complexity of the visit.
    We stated that we believe these proposed changes would keep the CCM 
requirements for RHCs and FQHCs consistent with the CCM requirements 
for practitioners billing under the PFS, simplify the provision of CCM 
services by RHCs and FQHCs, and improve access to these services 
without compromising quality of care, beneficiary privacy, or advance 
notice and consent.
    We received 31 comments on the proposed revisions to the CCM 
requirements for RHCs and FQHCs. The following is a summary of the 
comments we received:
    Comment: Commenters stated that they support CMS's efforts to 
ensure that CCM requirements for RHCs and FQHCs are not more burdensome 
than those for practitioners billing under the Medicare PFS.
    Response: We appreciate the support of the commenters.
    Comment: One commenter sought clarification on the requirements for 
initiating CCM with patients that have been seen in the RHC within the 
past year. The commenter asked if CCM could be initiated if the patient 
had any type of visit within the past year, or if the visit within the 
past year had to be an AWV, IPPE, or comprehensive E/M visit.
    Response: To initiate CCM with a patient that has been seen in the 
RHC or FQHC within the past year, an AWV, IPPE, or comprehensive E/M 
visit must have taken place within the past year in the RHC or FQHC 
that is billing for the CCM service. No other type of visit would meet 
the requirement for initiating CCM services.
    Comment: A few commenters were concerned that RHCs and FQHCs were 
charging beneficiaries for coinsurance for non-face-to-face services, 
and recommended that the copayment be waived or that CMS pursue waivers 
of cost-sharing for care coordination codes. One of these commenters 
stated that patients are often unwilling to pay the patient share of 
the CCM services since rural providers often have already been

[[Page 80257]]

providing similar services without additional cost to the patients.
    Response: As previously stated, we do not have the authority to 
waive the copayment requirements for CCM services. While many 
practitioners, including those in rural areas, have always provided 
some care management services, we believe that payment for CCM services 
will enable many RHCs and FQHCs to furnish comprehensive and systematic 
care coordination services that were previously unavailable or only 
sporadically offered.
    Comment: A commenter asked for clarification on how claims for 
patients in RHCs and FQHCs with pre-existing care management plans 
should be handled, and suggested that CMS permit claims for services 
for these patients.
    Response: We are not entirely clear what this commenter is 
suggesting. RHCs and FQHCs that bill for CCM services must develop a 
comprehensive care plan that includes all the elements previously 
described and also listed in Table 11. When all the requirements for 
furnishing CCM services are met, including the development of the 
comprehensive care plan, the RHC or FQHC would submit a claim for CCM 
payment using CPT code 99490. Only the time spent furnishing CCM 
services after CCM is initiated with the patient is counted toward the 
minimum 20 minutes required for CCM billing. There is no additional 
payment for a pre-existing care plan, and if a comprehensive care plan 
that meets the CCM requirements was developed before the initiation of 
CCM services, the time spent developing the plan would not be counted 
toward the 20 minute minimum requirement.
    Comment: A few commenters requested clarification on whether RHCs 
and FQHCs could bill the new CCM codes for either complex CCM services 
(CPT 99487 and 99489) or the separately billable comprehensive CCM 
assessment and care planning (G0506).
    Response: As we noted in the proposed rule, we did not propose to 
adopt codes to provide for an additional payment for patients who 
require extensive assessment or care planning because payments for RHC 
and FQHC services are not adjusted for the length or complexity of the 
visit. Therefore, the codes identified by the commenters are not 
separately billable by an RHC or FQHC.
    Comment: A few commenters recommended that CMS allow RHCs and FQHCs 
to bill for the new CCM codes, and to allow safety net providers to 
bill for preventive services in addition to the all-inclusive rate for 
RHCs and the PPS rate for FQHCs. The commenters stated that the payment 
structure for RHCs and FQHCs are a disincentive to provide preventative 
services in addition to E/M services at the same visit.
    Response: RHCs and FQHCs are paid for CCM services when CPT code 
99490 is billed either alone or with other payable services on a RHC or 
FQHC claim. The RHC and FQHC payment structures and payment for 
preventive services is outside the scope of this final rule.
    Comment: Several commenters recommended that CMS provide separate 
payment for psychiatric collaborative care management services 
furnished in RHCs and FQHCs, including CPT codes G0502, G0503, G0504 
and G0507. The commenters stated that allowing RHCs and FQHCs to bill 
for these services will ensure that their patients who have been 
diagnosed with a mental health or substance use disorder have access to 
high-quality care tailored to their individual condition and 
circumstances.
    Response: To be eligible for CCM services, a Medicare beneficiary 
must have two or more chronic conditions that are expected to last at 
least 12 months (or until the death of the patient), and place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline. While CCM is typically 
associated with primary care conditions, patient eligibility is 
determined by the RHC or FQHC practitioner, and mental health 
conditions are not excluded. We invite comments on whether an 
additional code specifically for mental health conditions is necessary 
for RHCs and FQHCs that want to include beneficiaries with mental 
health conditions in their CCM services.
    After considering the comments, we are finalizing as proposed the 
revisions to the requirements for CCM services furnished by RHCs and 
FQHCs.

F. Improving Payment Accuracy for Services: Diabetes Self-Management 
Training (DSMT)

    Section 1861(s)(2)(S) of the Act specifies that medical and other 
health services include DSMT services as defined in section 1861(qq) of 
the Act. DSMT services are intended to educate beneficiaries in the 
successful self-management of diabetes. DSMT includes, as applicable, 
instructions in self-monitoring of blood glucose; education about diet 
and exercise; an insulin treatment plan developed specifically for the 
patient who is insulin-dependent; and motivation for patients to use 
the new skills for self-management (see 42 CFR 410.144(a)(5)). DSMT 
services are reported under HCPCS codes G0108 (Diabetes outpatient 
self-management training services, individual, per 30 minutes) and 
G0109 (Diabetes outpatient self- management training services, group 
session (2 or more), per 30 minutes). The benefit, as specified at 42 
CFR 410.141, consists of 1 hour of individual and 9 hours of group 
training unless special circumstances warrant more individual training 
or no group session is available within 2 months of the date the 
training is ordered.
    Section 1861(qq) of the Act specifies that DMST services are 
furnished by a certified provider, defined as a physician or other 
individual or entity that also provides, in addition to DSMT, other 
items or services for which payment may be made under Medicare. The 
physician, individual or entity that furnishes the training also must 
meet certain quality standards. The physician, individual or entity can 
meet standards established by us or standards originally established by 
the National Diabetes Advisory Board and subsequently revised by 
organizations who participated in their establishment, or can be 
recognized by an organization that represents individuals with diabetes 
as meeting standards for furnishing the services.
    We require that all those who furnish DSMT services be accredited 
as meeting quality standards by a CMS-approved national accreditation 
organization (NAO). In accordance with Sec.  410.144, a CMS-approved 
NAO may accredit an individual, physician or entity to meet one of 
three sets of DSMT quality standards: CMS quality standards; the 
National Standards for Diabetes Self-Management Education Programs 
(National Standards); or the standards of an NAO that represents 
individuals with diabetes that meet or exceed our quality standards. 
Currently, we recognize the American Diabetes Association and the 
American Association of Diabetes Educators as approved NAOs, both of 
whom follow National Standards. Medicare payment for outpatient DSMT 
services is made in accordance with 42 CFR 414.63.
    An article titled ``Use of Medicare's Diabetes Self-Management 
Training Benefit'' was published in Health Education Behavior on 
January 23, 2015. The article noted that only 5 percent of Medicare 
beneficiaries with newly diagnosed diabetes used DSMT services. The 
article recommended that future research identify barriers to DSMT 
access.
    In the CY 2017 PFS proposed rule (81 FR 45215), we identified 
issues that the

[[Page 80258]]

DSMT community had brought to our attention which may contribute to the 
low utilization of these services, and indicated that we plan to 
address and clarify those issues through Medicare program instructions 
as appropriate. We also solicited public comment as to other access 
barriers--including whether Medicare payment for these services is 
accurate--to help us identify and address them. We appreciate the many 
comments regarding many issues in response to our solicitation.
    Comment: Many commenters stated that the payment rates were too low 
but did not suggest specific changes in the inputs used to develop 
payment rates under the PFS for particular services (specifically, work 
RVUs and direct PE inputs). We also received additional comments 
identifying multiple other possible barriers to access. These 
commenters' recommendations primarily addressed issues related to 
regulatory and statutory DSMT requirements, such as: (a) Expanding of 
the definition of diabetes to include hemoglobin A1C as one of the 
criteria for diagnosing diabetes; (b) modifying the definition of 
certified provider to include the certified diabetes educator (CDE) to 
permit them to bill for DSMT; (c) allowing physicians and NPPs, other 
than the one treating the beneficiary's diabetes, as required by 
regulation, to order DSMT services; and, (d) eliminating the copays and 
deductible for DSMT services.
    Response: We appreciate the comments received and will consider 
changes in valuation of these services and other regulatory issues 
raised by commenters for future rulemaking. We also appreciate 
commenters' feedback on several subregulatory guidelines and other 
operational issues that we will consider addressing outside of 
rulemaking.

G. Target for Relative Value Adjustments for Misvalued Services

    Section 1848(c)(2)(O) of the Act establishes an annual target for 
reductions in PFS expenditures resulting from adjustments to relative 
values of misvalued codes. Under section 1848(c)(2)(O)(ii) of the Act, 
if the estimated net reduction in expenditures for a year as a result 
of adjustments to the relative values for misvalued codes is equal to 
or greater than the target for that year, reduced expenditures 
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS in accordance with the existing budget 
neutrality requirement under section 1848(c)(2)(B)(ii)(II) of the Act. 
The provision also specifies that the amount by which such reduced 
expenditures exceeds the target for a given year shall be treated as a 
net reduction in expenditures for the succeeding year, for purposes of 
determining whether the target has been met for that subsequent year. 
Section 1848(c)(2)(O)(iv) of the Act defines a target recapture amount 
as the difference between the target for the year and the estimated net 
reduction in expenditures under the PFS resulting from adjustments to 
RVUs for misvalued codes. Section 1848(c)(2)(O)(iii) of the Act 
specifies that, if the estimated net reduction in PFS expenditures for 
the year is less than the target for the year, an amount equal to the 
target recapture amount shall not be taken into account when applying 
the budget neutrality requirements specified in section 
1848(c)(2)(B)(ii)(II) of the Act. Under section 1848(c)(2)(O)(v) of the 
Act, the target that applies to calendar years (CYs) 2017 and 2018 is 
calculated as 0.5 percent of the estimated amount of expenditures under 
the PFS for the year.
    In CY 2016 PFS rulemaking, we proposed and finalized a methodology 
to implement this statutory provision.
    Because the annual target is calculated by measuring changes from 
one year to the next, for CY 2016, we considered how to account for 
changes in values that are best measured over 3 years, instead of 2 
years. As we described in the CY 2016 final rule with comment period 
(80 FR 70932), our general valuation process for potentially misvalued, 
new, and revised codes was to establish values on an interim final 
basis for a year in the PFS final rule with comment period. Then, 
during the 60-day period following the publication of the final rule 
with comment period, we would accept public comment about those 
valuations. In the final rule with comment period for the subsequent 
year, we would consider and respond to public comments received on the 
interim final values, and make any appropriate adjustments to values 
based on those comments. Under that process for revaluing new, revised, 
and misvalued codes, we believe the overall change in valuation for 
many codes would best be measured across values for 3 years: between 
the original value in the first year; the interim final value in the 
second year; and the finalized value in the third year. However, the 
target calculation for a year would only be comparing changes in RVUs 
between 2 years and not among 3 years, so the contribution of a 
particular change towards the target for any single year would be 
measured against only the preceding year without regard to the overall 
change that takes place over 3 years.
    For recent years, interim final values for misvalued codes (year 2) 
have generally reflected reductions relative to original values (year 
1), and for most codes, the interim final values (year 2) are 
maintained and finalized (year 3). However, when values for particular 
codes have changed between the interim final (year 2) and final values 
(year 3) based on public comment, the general tendency has been that 
codes increase in the final value (year 3) relative to the interim 
final value (year 2), even in cases where the final value (year 3) 
represents a decrease from the original value (year 1). Therefore, for 
these codes, the year 2 changes compared to year 1 would risk over-
representing the overall reduction, while the year 3 to year 2 changes 
would represent an increase in value. We noted that if there were 
similar targets in every PFS year, and a similar number of misvalued 
code changes made on an interim final basis, the incongruence in 
measuring what is really a 3-year change in 2-year increments might not 
be particularly problematic since each year's calculation would 
presumably include a similar number of codes measured between years 1 
and 2 and years 2 and 3.
    However, including changes that take place over 3 years generated 
challenges in calculating the target for CY 2016. Because there was no 
target for CY 2015, any reductions that occurred on an interim final 
basis for CY 2015 were not counted toward achievement of a target. If 
we had then included any upward adjustments made to these codes based 
on public comment as ``misvalued code'' changes for CY 2016, we would 
effectively be counting the service-level increases for 2016 (year 3) 
relative to 2015 (year 2) against achievement of the target without any 
consideration to the service-level changes relative to 2014 (year 1), 
even in cases where the overall change in valuation was negative.
    Therefore, we proposed and finalized the decision to exclude code-
level input changes for CY 2015 interim final values from the 
calculation of the CY 2016 misvalued code target since the misvalued 
change occurred over multiple years, including years not applicable to 
the misvalued code target provision.
    For the CY 2017 final rule, we will be finalizing values (year 3) 
for codes that were interim final in CY 2016 (year 2). Unlike codes 
that were interim final for CY 2015, the codes that are interim final 
for CY 2016 were included as misvalued codes and will fall within the 
range of years for which the misvalued code target provision applies. 
Thus, overall changes in values for these codes would

[[Page 80259]]

be measured in the target across 3 full years: The original value in 
the first year (CY 2015); the interim final value in the second year 
(CY 2016); and the finalized value in the third year (CY 2017). The 
changes in valuation for these CY 2016 interim final codes were 
previously measured and counted towards the target during their initial 
change in valuation between years 1 and 2.
    As such, we proposed to include changes in values of the CY 2016 
interim final codes toward the CY 2017 misvalued code target. We 
believe that this is consistent with the approach that we finalized in 
the CY 2016 PFS final rule with comment period. The changes in values 
of CY 2015 interim final codes were not counted towards the misvalued 
code target in CY 2016 since the valuation change occurred over 
multiple years, including years not applicable to the misvalued code 
target provision. However, both of the changes in valuation for the CY 
2016 interim final codes, from year 1 to year 2 (CY 2015 to CY 2016) 
and from year 2 to year 3 (CY 2016 to CY 2017), have taken place during 
years that occur within the misvalued code target provision. We 
therefore believe that any adjustments made to these codes based on 
public comment should be considered towards the achievement of the 
target for CY 2017, just as any changes in valuation for these same CY 
2016 interim final codes previously counted towards the achievement of 
the target for CY 2016.
    We solicited comments regarding this proposal. We also reminded 
commenters that we revised our process for revaluing new, revised and 
misvalued codes so that we will be proposing and finalizing values for 
most of the misvalued codes during a single calendar year. After this 
year, there will be far fewer instances of interim final codes and 
changes that are best measured over 3 years.
    We refer readers to the regulatory impact analysis section of this 
final rule for the net reduction in expenditures relative to the 0.5 
percent target for CY 2017, and the resulting adjustment required to be 
made to the conversion factor. Additionally, we refer readers to the 
public use file that provides a comprehensive description of how the 
target is calculated, as well as the estimated impact by code family on 
the CMS Web site under the supporting data files for the CY 2017 PFS 
final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    The following is summary of the comments we received regarding the 
target for relative value adjustments for misvalued services.
    Comment: Several commenters expressed support for the CMS estimate 
that there would be no target recapture amount by which to reduce 
payments made under the PFS in CY 2017.
    Response: We appreciate the comments. We remind stakeholders that 
the final determination of the target recapture amount is based on 
finalized RVUs for the relevant codes. We refer readers to the 
regulatory impact analysis section of this final rule for the net 
reduction in expenditures relative to the 0.5 percent target for CY 
2017, and the resulting adjustment that is required to be made to the 
conversion factor.
    Comment: One commenter urged CMS to broaden its approach to 
counting misvalued code payment adjustments in the final rule. The 
commenter stated that CMS was taking a narrow approach to the misvalued 
code target.
    Response: We finalized our methodology for calculating the 
estimated net reduction relative to the misvalued code target in the CY 
2016 final rule with comment period (80 FR 70921-70927). For CY 2017, 
we proposed a modification to that methodology that only addressed how 
changes to interim final codes would be addressed when both first and 
second year changes could be counted towards a misvalued code target 
since CY 2017 is the first year for that circumstance. We did not make 
a proposal on the more general issue of the methodology used to 
calculate the net reductions for the misvalued code target, which, as 
noted above, was finalized in the CY 2016 PFS final rule with comment 
period.
    We did not receive any public comments on our proposal to include 
changes in values of the CY 2016 interim final codes toward the CY 2017 
misvalued code target.
    After consideration of comments received, we are finalizing our 
proposal to count any adjustments to interim final codes towards the 
misvalued code target when both first and second year changes can be 
counted towards a misvalued codes target.

H. Phase-In of Significant RVU Reductions

    Section 1848(c)(7) of the Act specifies that for services that are 
not new or revised codes, if the total RVUs for a service for a year 
would otherwise be decreased by an estimated 20 percent or more as 
compared to the total RVUs for the previous year, the applicable 
adjustments in work, PE, and MP RVUs shall be phased in over a 2-year 
period. In the CY 2016 PFS rulemaking, we proposed and finalized a 
methodology to implement this statutory provision. To determine which 
services are described by new or revised codes for purposes of the 
phase-in provision, we apply the phase-in to all services that are 
described by the same, unrevised code in both the current and update 
year, and exclude codes that describe different services in the current 
and update year.
    Because the phase-in of significant reductions in RVUs falls within 
the budget neutrality requirements specified in section 
1848(c)(2)(B)(ii)(II) of the Act, we estimate the total RVUs for a 
service prior to the budget-neutrality redistributions that result from 
implementing phase-in values. In implementing the phase-in, we consider 
a 19 percent reduction as the maximum 1-year reduction for any service 
not described by a new or revised code. This approach limits the year 
one reduction for the service to the maximum allowed amount (that is, 
19 percent), and then phases in the remainder of the reduction.
    The statute provides that the applicable adjustments in work, PE, 
and MP RVUs shall be phased in over a 2-year period when the RVU 
reduction for a code for a year is estimated to be equal to or greater 
than 20 percent. Since CY 2016 was the first year in which we applied 
the phase-in transition, CY 2017 will be the first year in which a 
single code could be subject to RVU reductions greater than 20 percent 
for 2 consecutive years.
    Under our finalized policy, the only codes that are not subject to 
the phase-in are those that are new or revised, which we defined as 
those services that are not described by the same, unrevised code in 
both the current and update year, or by the same codes that describe 
different services in the current and update year. Since CY 2016 was 
the first year for which the phase-in provision applied, we did not 
address how we would handle codes with values that had been partially 
phased in during the first year, but that have a remaining phase-in 
reduction of 20 percent or greater.
    The significant majority of codes with reductions in RVUs that are 
greater than 20 percent in year one would not be likely to meet the 20 
percent threshold in a consecutive year. However, in a few cases, 
significant changes (for example, in the input costs included in the 
valuation of a service) could produce reductions of 20 percent or 
greater in consecutive years.
    As stated in the CY 2017 PFS proposed rule, we believed that a 
consistent methodology regarding the phase-in transition should be 
applied to these cases. We proposed to reconsider

[[Page 80260]]

in each year, for all codes that are not new or revised codes and 
including codes that were assigned a phase-in value in the previous 
year, whether the total RVUs for the service would otherwise be 
decreased by an estimated 20 percent or more as compared to the total 
RVUs for the previous year. Under this proposed policy, the 19 percent 
reduction in total RVUs would continue to be the maximum one-year 
reduction for all codes (except those considered new and revised), 
including those codes with phase-in values in the previous year. In 
other words, for purposes of the 20 percent threshold, every service is 
evaluated anew each year, and any applicable phase-in is limited to a 
decrease of 19 percent. For example, if we were to adopt a 50 percent 
reduction in total RVUs for an individual service, the reduction in any 
particular year would be limited to a decrease of 19 percent in total 
RVUs. Because we do not set rates 2 years in advance, the phase-in 
transition would continue to apply until the year-to-year reduction for 
a given code does not meet the 20 percent threshold. We solicited 
comments regarding this proposal.
    The list of codes subject to the phase-in and the associated 
proposed RVUs that result from this methodology is available on the CMS 
Web site under downloads for the CY 2017 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    The following is summary of the comments we received regarding the 
phase-in of significant RVU reductions.
    Comment: Many commenters supported the proposal that a 19 percent 
reduction in total RVUs would continue to be the maximum one-year 
reduction for all codes that are not new or revised. These commenters 
urged CMS to finalize the proposal.
    Response: We appreciate the support from the commenters.
    Comment: Several commenters suggested that CMS should extend the 
threshold for triggering the phase-in provision, by using a lower 
single-year maximum reduction (such as 10 percent), at a rate different 
than what the statute stipulates. The commenters stated that a lower 
threshold would provide a greater safeguard against payment cuts and 
disruption of services.
    Response: Section 1848(c)(7) of the Act requires the phase-in if 
the total RVUs for a service for a year would otherwise be decreased by 
an estimated 20 percent or larger. We do not believe that we have the 
statutory authority to establish a different threshold value for when 
the phase-in applies.
    Comment: One commenter objected to CMS' decision to exclude from 
the phase-in codes with a reduction of 20 percent or more that fall 
within a family with significant coding revisions. The commenter 
requested that CMS reconsider this policy.
    Response: We understand the commenters' concerns. In the CY 2016 
final rule with comment period (80 FR 70927-70931), we finalized a 
policy to identify services that are not subject to the phase-in 
because they are new or revised codes. As we wrote at the time, we 
excluded as new and revised codes those codes that describe a different 
set of services in the update year when compared to the current year by 
virtue of changes in other, related codes, or codes that are part of a 
family with significant coding revisions. Significant coding revisions 
within a family of codes can change the relationships among codes to 
the extent that it changes the way that all services in the group are 
reported, even if some individual codes retain the same number or, in 
some cases, the same descriptor. We continue to believe that this is 
the most accurate methodology to use in identifying new and revised 
codes for the purposes of the phase-in transition. We also note that we 
did not make a proposal to change how we identify services to which the 
phase-in does not apply.
    Comment: A commenter requested that CMS apply the phase-in policy 
to services in the PFS with year-to-year reductions of 20 percent or 
more in payment amount due to the statutory cap that requires payment 
for the technical component (TC) of certain imaging services furnished 
in the office setting to be made the lesser of the PFS or OPPS rates. 
The commenter stated that this application would capture the spirit of 
the phase-in legislation in dampening the impact of significant payment 
reductions on a year to year basis.
    Response: Section 1848(c)(7) of the Act requires the phase-in of 
reductions of 20 percent or more in the total RVUs for individual 
services. The OPPS cap, required under section 1848(b)(4)(A) of the 
Act, specifies that if the PFS payment rate for the TC of certain 
imaging services exceeds the OPPS payment amount for the services, the 
OPPS payment amount must be substituted for the PFS TC payment amount. 
The OPPS cap refers to, and requires substitution of, payment rates for 
individual imaging services, and not a reduction in the total RVUs for 
those services. As such, services that are subject to the OPPS cap are 
not subject to the phase-in on that basis.
    Comment: One commenter opposed the phase-in proposal. The commenter 
stated that the proposal twisted a plain reading of the law to 
effectively extend the phase-in period well beyond the 2 years 
prescribed by the statute. The commenter questioned why Medicare 
beneficiaries should have to pay a higher fee for overvalued services 
when identified as such, and pointed out that in the budget-neutral 
environment of the fee schedule, the proposal would delay the benefit 
of these RVU reductions to the rest of the services listed in the PFS.
    Response: We appreciate the concerns raised by the commenter. As we 
have addressed over several rulemaking cycles, we are concerned about 
the impact of misvalued services in creating distortions in relativity 
across the fee schedule. However, we have already finalized through 
notice and comment rulemaking and continue to believe that limiting 
reductions to 19 percent as the maximum 1-year decrease for all codes 
(except those considered new and revised) is the best and most fair way 
to apply the phase-in. Additionally, because we do not set rates 2 
years in advance, we believe there are significant obstacles to 
implementing an alternative methodology. For example, codes may be 
reviewed multiple times in a short period of time, and may have further 
decreases in total RVUs for a subsequent year due to a variety of 
reasons in addition to any change inputs from the initial year phase-
in. These might include supply and equipment price updates in non-
reviewed years, significant changes in specialty mix of practitioners 
reporting the service, or changes in other PFS ratesetting policies 
which could lead to several consecutive years of RVU reductions. In any 
such cases, it would be impractical to identify with certainty what 
portion of reductions in code values are due to input changes 
established in a prior year versus input or policy changes from the 
current year. We also note that all of these circumstances are 
relatively rare since it is unusual for changes in code inputs to 
result in reductions of greater than 40 percent. Therefore, while we 
appreciate the importance of improving payment accuracy as soon as can 
be practicable for the reasons stated by the commenter, we also believe 
that, on balance, the best and most fair approach to implementing the 
required phase-in of RVU reductions over multiple years is to re-
examine eligible codes for the phase-in on an annual basis, in 
conjunction with our annual ratesetting.
    After consideration of comments received, we are finalizing the 
policy as proposed.

[[Page 80261]]

I. Geographic Practice Cost Indices (GPCIs)

1. Background
    Section 1848(e)(1)(A) of the Act requires us to develop separate 
Geographic Practice Cost Indices (GPCIs) to measure relative cost 
differences among localities compared to the national average for each 
of the three fee schedule components (that is, work, PE, and 
malpractice (MP)). The PFS localities are discussed in section II.E.3. 
of this final rule. Although the statute requires that the PE and MP 
GPCIs reflect the full relative cost differences, section 
1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only 
one-quarter of the relative cost differences compared to the national 
average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 
1.5 work GPCI floor for services furnished in Alaska beginning January 
1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE 
GPCI floor for services furnished in frontier states (as defined in 
section 1848(e)(1)(I) of the Act) beginning January 1, 2011. 
Additionally, section 1848(e)(1)(E) of the Act provided for a 1.0 floor 
for the work GPCIs, which was set to expire on March 31, 2015. Section 
201 of the MACRA amended the statute to extend the 1.0 floor for the 
work GPCIs through CY 2017 (that is, for services furnished no later 
than December 31, 2017).
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the GPCIs at least every 3 years. Section 
1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed 
since the date of the last previous GPCI adjustment, the adjustment to 
be applied in the first year of the next adjustment shall be half of 
the adjustment that otherwise would be made. Therefore, since the 
previous GPCI update was implemented in CY 2014 and CY 2015, we 
proposed to phase in 1/2 of the latest GPCI adjustment in CY 2017.
    We have completed a review of the GPCIs and proposed new GPCIs in 
this final rule. We also calculate a geographic adjustment factor (GAF) 
for each PFS locality. The GAFs are a weighted composite of each area's 
work, PE and malpractice expense GPCIs using the national GPCI cost 
share weights. While we do not actually use GAFs in computing the fee 
schedule payment for a specific service, they are useful in comparing 
overall areas costs and payments. The actual effect on payment for any 
actual service would deviate from the GAF to the extent that the 
proportions of work, PE and MP RVUs for the service differ from those 
of the GAF.
    As noted above, section 201 of the MACRA extended the 1.0 work GPCI 
floor for services furnished through December 31, 2017. Therefore, the 
proposed CY 2017 work GPCIs and summarized GAFs reflect the 1.0 work 
floor. Additionally, as required by sections 1848(e)(1)(G) and 
1848(e)(1)(I) of the Act, the 1.5 work GPCI floor for Alaska and the 
1.0 PE GPCI floor for frontier states are permanent, and therefore, 
applicable in CY 2017. See Addenda D and E to this final rule for the 
CY 2017 GPCIs and summarized GAFs available on the CMS Web site under 
the supporting documents section of the CY 2017 PFS final rule located 
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
2. GPCI Update
    The proposed updated GPCI values were calculated by a contractor. 
There are three GPCIs (work, PE, and MP), and all GPCIs are calculated 
relative to the national average for each measure. Additionally, each 
of the three GPCIs relies on its own data source(s) and methodology for 
calculating its value as described below. Additional information on the 
CY 2017 GPCI update may be found in our contractor's draft report, 
``Draft Report on the CY 2017 Update of the Geographic Practice Cost 
Index for the Medicare Physician Fee Schedule,'' which is available on 
our Web site. It is located under the supporting documents section for 
the CY 2017 PFS final rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
a. Work GPCIs
    The work GPCIs are designed to reflect the relative costs of 
physician labor by Medicare PFS locality. As required by statute, the 
work GPCI reflects one quarter of the relative wage differences for 
each locality compared to the national average.
    To calculate the work GPCIs, we use wage data for seven 
professional specialty occupation categories, adjusted to reflect one-
quarter of the relative cost differences for each locality compared to 
the national average, as a proxy for physicians' wages. Physicians' 
wages are not included in the occupation categories used in calculating 
the work GPCI because Medicare payments are a key determinant of 
physicians' earnings. Including physician wage data in calculating the 
work GPCIs would potentially introduce some circularity to the 
adjustment since Medicare payments typically contribute to or influence 
physician wages. That is, including physicians' wages in the physician 
work GPCIs would, in effect, make the indices, to some extent, 
dependent upon Medicare payments.
    The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based 
on professional earnings data from the 2000 Census. However, for the CY 
2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage 
and earnings data were not available from the more recent Census 
because the ``long form'' was discontinued. Therefore, we used the 
median hourly earnings from the 2006 through 2008 Bureau of Labor 
Statistics (BLS) Occupational Employment Statistics (OES) wage data as 
a replacement for the 2000 Census data. The BLS OES data meet several 
criteria that we consider to be important for selecting a data source 
for purposes of calculating the GPCIs. For example, the BLS OES wage 
and employment data are derived from a large sample size of 
approximately 200,000 establishments of varying sizes nationwide from 
every metropolitan area and can be easily accessible to the public at 
no cost. Additionally, the BLS OES is updated regularly, and includes a 
comprehensive set of occupations and industries (for example, 800 
occupations in 450 industries). For the CY 2014 GPCI update, we used 
updated BLS OES data (2009 through 2011) as a replacement for the 2006 
through 2008 data to compute the work GPCIs.
    Because of its reliability, public availability, level of detail, 
and national scope, we believe the BLS OES data continue to be the most 
appropriate source of wage and employment data for use in calculating 
the work GPCIs (and as discussed in section II.E.2.b the employee wage 
component and purchased services component of the PE GPCI). Therefore, 
for the proposed CY 2017 GPCI update, we used updated BLS OES data 
(2011 through 2014) as a replacement for the 2009 through 2011 data to 
compute the work GPCIs.
b. Practice Expense GPCIs
    The PE GPCIs are designed to measure the relative cost difference 
in the mix of goods and services comprising practice expenses (not 
including malpractice expenses) among the PFS localities as compared to 
the national average of these costs. Whereas the physician work GPCIs 
(and as discussed later in this section, the MP GPCIs) are comprised of 
a single index, the PE GPCIs are comprised of four component indices 
(employee wages; purchased services; office rent; and equipment, 
supplies and

[[Page 80262]]

other miscellaneous expenses). The employee wage index component 
measures geographic variation in the cost of the kinds of skilled and 
unskilled labor that would be directly employed by a physician 
practice. Although the employee wage index adjusts for geographic 
variation in the cost of labor employed directly by physician 
practices, it does not account for geographic variation in the cost of 
services that typically would be purchased from other entities, such as 
law firms, accounting firms, information technology consultants, 
building service managers, or any other third-party vendor. The 
purchased services index component of the PE GPCI (which is a separate 
index from employee wages) measures geographic variation in the cost of 
contracted services that physician practices would typically buy. (For 
more information on the development of the purchased service index, we 
refer readers to the CY 2012 PFS final rule with comment period (76 FR 
73084 through 73085)). The office rent index component of the PE GPCI 
measures relative geographic variation in the cost of typical physician 
office rents. For the medical equipment, supplies, and miscellaneous 
expenses component, we believe there is a national market for these 
items such that there is not significant geographic variation in costs. 
Therefore, the equipment, supplies and other miscellaneous expense cost 
index component of the PE GPCI is given a value of 1.000 for each PFS 
locality.
    For the previous update to the GPCIs (implemented in CY 2014) we 
used 2009 through 2011 BLS OES data to calculate the employee wage and 
purchased services indices for the PE GPCI. As discussed in section 
II.E.2.a., because of its reliability, public availability, level of 
detail, and national scope, we continue to believe the BLS OES is the 
most appropriate data source for collecting wage and employment data. 
Therefore, in calculating the proposed CY 2017 GPCI update, we used 
updated BLS OES data (2011 through 2014) as a replacement for the 2009 
through 2011 data for purposes of calculating the employee wage 
component and purchased service index component of the PE GPCI.
c. Malpractice Expense (MP) GPCIs
    The MP GPCIs measure the relative cost differences among PFS 
localities for the purchase of professional liability insurance (PLI). 
The MP GPCIs are calculated based on insurer rate filings of premium 
data for $1 million to $3 million mature claims-made policies (policies 
for claims made rather than services furnished during the policy term). 
For the CY 2014 GPCI update (seventh update) we used 2011 and 2012 
malpractice premium data (78 FR 74382). The proposed CY 2017 MP GPCI 
update reflects 2014 and 2015 premium data. Additionally, the proposed 
CY 2017 MP GPCI update reflects several proposed technical refinements 
to the MP GPCI methodology as discussed later in section 5.
d. GPCI Cost Share Weights
    For CY 2017 GPCIs, we proposed to continue to use the current cost 
share weights for determining the PE GPCI values and locality GAFs. We 
refer readers to the CY 2014 PFS final rule with comment period (78 FR 
74382 through 74383), for further discussion regarding the 2006-based 
MEI cost share weights revised in CY 2014 that were also finalized for 
use in the CY 2014 (seventh) GPCI update.
    The GPCI cost share weights for CY 2017 are displayed in Table 12.

          Table 12--Cost Share Weights for CY 2017 GPCI Update
------------------------------------------------------------------------
                                                                Proposed
                                                     Current    CY 2017
                                                       cost       cost
                 Expense category                     share      share
                                                      weight     weight
                                                       (%)        (%)
------------------------------------------------------------------------
Work..............................................     50.866     50.866
Practice Expense..................................     44.839     44.839
  --Employee Compensation.........................     16.553     16.553
  --Office Rent...................................     10.223     10.223
  --Purchased Services............................      8.095      8.095
  --Equipment, Supplies, Other....................      9.968      9.968
Malpractice Insurance.............................      4.295      4.295
                                                   ---------------------
  Total...........................................    100.000    100.000
------------------------------------------------------------------------

e. PE GPCI Floor for Frontier States
    Section 10324(c) of the Affordable Care Act added a new 
subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0 
PE GPCI floor for physicians' services furnished in frontier states 
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of 
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for 
physicians' services furnished in states determined to be frontier 
states. In general, a frontier state is one in which at least 50 
percent of the counties are ``frontier counties,'' which are those that 
have a population per square mile of less than 6. For more information 
on the criteria used to define a frontier state, we refer readers to 
the FY 2011 Inpatient Prospective Payment System (IPPS) final rule (75 
FR 50160 through 50161). There are no changes in the states identified 
as Frontier States for the CY 2017 final rule. The qualifying states 
are: Montana, Wyoming, North Dakota, South Dakota, and Nevada. In 
accordance with statute, we would apply a 1.0 PE GPCI floor for these 
states in CY 2017.
f. Proposed GPCI Update
    As explained above in the background section, the periodic review 
and adjustment of GPCIs is mandated by section 1848(e)(1)(C) of the 
Act. At each update, the proposed GPCIs are published in the PFS 
proposed rule to provide an opportunity for public comment and further 
revisions in response to comments prior to implementation. As discussed 
later in this section, we are finalizing the GPCIs as proposed (except 
where we correct technical errors). The final CY 2017 updated GPCIs for 
the first and second year of the 2-year transition, along with the 
GAFs, are displayed in Addenda D and E to this final rule available on 
our Web site under the supporting documents section of the CY 2017 PFS 
final rule Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
3. Payment Locality Discussion
a. Background
    The current PFS locality structure was developed and implemented in 
1997. There are currently 89 total PFS localities; 34 localities are 
statewide areas (that is, only one locality for the entire state). 
There are 52 localities in the other 16 states, with 10 states having 2 
localities, 2 states having 3 localities, 1 state having 4 localities, 
and 3 states having 5 or more localities. The combined District of 
Columbia, Maryland, and Virginia suburbs; Puerto Rico; and the Virgin 
Islands are the remaining three localities of the total of 89 
localities. The development of the current locality structure is 
described in detail in the CY 1997 PFS final rule (61 FR 34615) and the 
subsequent final rule with comment period (61 FR 59494). We note that 
the localities generally represent a grouping of one or more 
constituent counties.
    Prior to 1992, Medicare payments for physicians' services were made 
under the reasonable charge system. Payments were based on the charging 
patterns of physicians. This resulted in large differences in payment 
for physicians' services among types of services, geographic payment 
areas, and physician specialties. Recognizing this, the Congress 
replaced the reasonable

[[Page 80263]]

charge system with the Medicare PFS in the Omnibus Budget 
Reconciliation Act (OBRA) of 1989, and the PFS went into effect January 
1, 1992. Payments under the PFS are based on the relative resources 
involved with furnishing services, and are adjusted to account for 
geographic variations in resource costs as measured by the GPCIs.
    Payment localities originally were established under the reasonable 
charge system by local Medicare carriers based on their knowledge of 
local physician charging patterns and economic conditions. These 
localities changed little between the inception of Medicare in 1967 and 
the beginning of the PFS in 1992. Shortly after the PFS took effect, we 
undertook a study in 1994 that culminated in a comprehensive locality 
revision that was implemented in 1997 (61 FR 59494).
    The revised locality structure reduced the number of localities 
from 210 to the current 89, and the number of statewide localities 
increased from 22 to 34. The revised localities were based on locality 
resource cost differences as reflected by the GPCIs. For a full 
discussion of the methodology, see the CY 1997 PFS final rule with 
comment period (61 FR 59494). The current 89 fee schedule areas are 
defined alternatively by state boundaries (for example, Wisconsin), 
metropolitan areas (for example, Metropolitan St. Louis, MO), portions 
of a metropolitan area (for example, Manhattan), or rest-of-state areas 
that exclude metropolitan areas (for example, Rest of Missouri). This 
locality configuration is used to calculate the GPCIs that are in turn 
used to calculate payments for physicians' services under the PFS.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73261), changes to the PFS locality structure would generally result in 
changes that are budget neutral within a state. For many years, before 
making any locality changes, we have sought consensus from among the 
professionals whose payments would be affected. In recent years, we 
have also considered more comprehensive changes to locality 
configuration. In 2008, we issued a draft comprehensive report 
detailing four different locality configuration options (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/downloads/ReviewOfAltGPCIs.pdf). We refer readers to 
the CY 2014 PFS final rule with comment period for further discussion 
regarding that report, as well as a discussion about the Institute of 
Medicine's empirical study of the Medicare GAFs established under 
sections 1848(e) (PFS GPCI) and 1886(d)(3)(E) (IPPS wage index) of the 
Act.
    The following is a summary of the comments we received regarding 
the proposed CY 2017 GPCI update.
    Comment: A few commenters including a major specialty society 
expressed support for using more current data in calculating all three 
GPCIs.
    Response: We thank the commenters for their support.
    Comment: One commenter expressed support for the elimination of all 
geographic adjustment factors under the PFS, except those designed to 
achieve a specific public policy goal, such as to encourage physicians 
to practice in underserved areas. Another commenter opposed any 
decrease in the GPCI.
    Response: As previously discussed, section 1848(e)(1)(A) of the Act 
requires us to develop separate GPCIs to measure resource cost 
differences among localities compared to the national average for each 
of the three GPCI components, and section 1848(e)(1)(C) of the Act 
requires us to review and, if necessary, adjust the GPCIs at least 
every 3 years; and based on new data, GPCI values may increase or 
decrease.
    Comment: A few commenters expressed concern regarding payment for 
rural localities and recommended that CMS monitor how the GPCI 
calculation changes affect the sustainability of health services in 
rural communities. One commenter requested that CMS consider the 
ongoing data issues regarding the GPCIs raised by stakeholders in the 
Midwest, and establish 1.0 work and PE GPCI values for Wisconsin and 
Iowa.
    Response: As discussed previously in this section, we are required 
to update the GPCIs at least every 3 years to reflect the relative cost 
differences of operating a medical practice in each locality compared 
to the national average costs. Additionally, as previously discussed in 
this section, sections 1848(e)(1)(G) and 1848(e)(1)(I) of the Act 
established the permanent 1.5 work GPCI floor for Alaska and the 
permanent 1.0 PE GPCI floor for frontier States. We do not otherwise 
have the authority to establish similar GPCI floors or other policies 
that do not take into consideration the differences in physicians' 
resource costs among localities.
    Comment: One commenter supported the continuation of the 1.0 PE 
GPCI floor for frontier states.
    Response: As previously discussed, beginning January 1, 2011 
section 1848(e)(1)(I) of the Act set a permanent 1.0 PE GPCI floor for 
services furnished in frontier states (as defined in section 
1848(e)(1)(I) of the Act).
    Comment: Several commenters stated their objection to the use of 
residential rents as a proxy for physician office space costs, and 
stated that CMS should collect commercial rent data and use it either 
as the basis for measuring geographic differences in physician office 
rents or, if this is not feasible, use it to validate the residential 
rents as a proxy. A few commenters requested that CMS provide a 
specific explanation on the barriers to gaining better commercial rent 
data.
    Response: Because Medicare is a national program, and section 
1848(e)(1)(A) of the Act requires us to establish GPCIs to measure 
relative cost differences among localities compared to the national 
average, we believe it is important to use the best data that is 
available on a nationwide basis, that is regularly updated, and retains 
consistency area-to-area, year-to-year. Since there is currently no 
national data source available for physician office or other comparable 
commercial rents, we continue to use county-level residential rent data 
from the American Community Survey (ACS) as a proxy for the relative 
cost differences in commercial office rents. The ACS is administered by 
the United States Census Bureau, which is a leading source of national, 
robust, quality, publicly available data. We agree that a commercial 
data source for office rent that provided for adequate representation 
of urban and rural areas nationally would be preferable to a 
residential rent proxy. We have previously discussed in the CY 2005, CY 
2008, and CY 2011 (69 FR 66262, 72 FR 66376, and 75 FR 73257, 
respectively) final rules that we recognize that apartment rents may 
not be a perfect proxy for physician office rent. We have also 
conducted exhaustive searches for reliable commercial rent data sources 
that are publicly available in the past and have not found any reliable 
data that meets our accuracy needs, and we continue to conduct such 
searches. With regards to suggestion that CMS should collect commercial 
rent data, we note that we discussed this issue in the CY 2012 PFS 
final rule with comment period (76 FR 73088) and stated with reference 
to surveying physicians directly to gather data to compute office rent, 
we note that the development and implementation of a survey could take 
several years. Additionally, we have historically not sought direct 
survey data from physicians related to the GPCI to avoid issues of 
circularity and self-reporting bias. In the CY 2011 PFS final rule with 
comment period (75 FR 73259), we

[[Page 80264]]

solicited public comments regarding the benefits of utilizing physician 
cost reports to potentially achieve greater precision in measuring the 
relative cost difference among Medicare localities. We also asked for 
comments regarding the administrative burden of requiring physicians to 
routinely complete these cost reports and whether this should be 
mandatory for physicians' practices. We did not receive any feedback 
related to that comment solicitation during the open public comment 
period for the CY 2011 final rule with comment period. We continue to 
have concerns that physician cost reports could be prohibitively 
expensive, and as well about the administrative burden this approach 
would place on physician's office staff. We reiterate that the GPCIs 
are not an absolute measure of practice costs, rather they are a 
measure of the relative cost differences for each of the three GPCI 
components. The U.S. Census Bureau is a federal agency that specializes 
in data collection, accuracy, and reliability, and we continue to 
believe that where such a publicly available resource exists that can 
provide useful data to assess geographic cost differences in office 
rent, even though it is a proxy for the exact data we seek, that we 
should utilize that available resource. Therefore, given its national 
representation, reliability, high response rate and frequent updates, 
we continue to believe the ACS residential rent data is the most 
appropriate data source available at this time for the purposes of 
calculating the rent index of the PE GPCI.
    Comment: One commenter stated that it objects to the 8 percent 
weight that the rent expense category has been given by CMS in 
calculating the PE GPCI, and stated that office rent should be given a 
much larger weight to more accurately reflect its impact on physician 
practice expenses, and CMS should commit resources to update this data 
since it is based on 10-year old data from the 2006 AMA Physician 
Practice Information Survey (AMA PPIS).
    Response: We would like to clarify that the office rent expense 
category has a cost share weight of 10.223 percent, not 8 percent as 
indicated by the commenter. The MEI cost share weights were derived 
from data collected by the AMA on the AMA PPIS. CMS has previously 
stated that we believe the AMA PPIS is a reliable data source, however 
the AMA PPIS is not an ongoing data source that is regularly published. 
We continued to use the AMA PPIS data source in the CY 2014 revisions 
to the MEI which have not been further updated since, and therefore, as 
discussed above, the 2006-based MEI cost share weights finalized for 
use in the CY 2014 (seventh) GPCI update, were proposed for the CY 2017 
(eighth) GPCI update. The AMA is no longer conducting the AMA PPIS 
survey, and CMS' Office of the Actuary continues to look into viable 
options for updating the MEI cost share weights going forward. In the 
CY 2014 PFS final rule with comment period (78 FR 74275), we stated 
that we continue to investigate possible data sources to use for the 
purpose of rebasing the MEI in the future.
    Comment: A few commenters expressed concern with the use of 
unrelated proxy data for physician wages in geographic adjustment. The 
commenters expressed concern about GPCI proxy inputs that result in 
downward payment adjustments, which they believe do not reflect the 
actual cost of physician practices. The commenters stated that better 
data exist for measuring the real physician compensation rates, such as 
recruitment compensation surveys and wages for physicians employed at 
federally qualified health centers. The commenters also stated that 
MedPAC studies have confirmed that the data sources currently relied 
upon for geographic adjustment bear no correlation to physician 
earnings. One commenter also stated that CMS has acknowledged that the 
proxies utilized for the purposes of geographic adjustment have never 
been validated and there never has been a new data source utilized in 
the twenty years since the fee schedule was implemented. The commenters 
urged CMS to undertake the necessary studies to identify reference 
occupations that will accurately reflect the higher input costs of 
rural physician earnings, and implement the resulting corrections to 
the geographic adjustment of the fee schedule as soon as possible.
    Response: We appreciate the comments regarding the professional 
occupations used to determine the relative cost differences in 
physician earnings for purposes of calculating the work GPCI. In 
consideration of the ongoing concerns regarding the reference 
occupations and other proxy data used to calculate the GPCIs, we also 
note that in the past we received comments suggesting the use of survey 
data to determine GPCI values, and stated that we would continue to 
consider the possibility of establishing a physician cost report and 
requiring a sufficiently large sample of physicians in each locality to 
report data on actual costs incurred. However we also stated that we 
believed that a physician cost report could take years to develop and 
implement, and could be prohibitively expensive (75 FR 73259). We 
solicited public comment regarding the potential benefits to be gained 
from establishing a physician cost report and whether this approach is 
appropriate to achieve potentially greater precision in measuring the 
relative cost differences in physicians' practices among PFS 
localities. We also solicited public comments on the potential 
administrative burden of requiring physicians to routinely complete and 
submit a cost report. We did not receive any feedback specifically 
related to that comment solicitation (76 FR 73088). As noted previously 
in this section, physicians' wages are not included in the occupation 
categories (reference occupations) used in calculating the work GPCI 
because Medicare payments are a key determinant of physicians' 
earnings. We have long maintained that including physician wage data in 
calculating the work GPCIs would potentially introduce some circularity 
to the adjustment since Medicare payments typically contribute to 
physician wages. In other words, including physicians' wages in the 
physician work GPCI would, in effect, make the indices, to some extent, 
dependent upon Medicare payments, which in turn are impacted by the 
indices. We reiterate that the work GPCI is not an absolute measure of 
physician earnings; rather it is a measure of the relative wage 
differences for each locality as compared to the national average; 
additionally, the work GPCI reflects only one quarter of those relative 
wage differences consistent with the statutory requirement as discussed 
previously in this section.
    Comment: We received a few comments on the PFS locality structure 
that were not within the scope of the CY 2017 proposed rule. For 
example, several commenters requested that Prince William and Loudoun 
counties in Virginia be changed from the Rest of Virginia locality into 
the DC + MD/VA Suburbs locality. Another commenter stated that it 
believes large cuts to rural and rest-of-State areas should be avoided 
or minimized, but locality boundaries with large payment differences 
should not be in the middle of urban areas, because they create payment 
cliffs where payment can change by up to eight percent if an office 
location is moved across a street or down a block. The commenter stated 
that CMS should act quickly to create locality definitions that are not 
constrained by county boundaries, and advocated implementing locality

[[Page 80265]]

definition changes based on Metropolitan Statistical Areas.
    Response: We appreciate the suggestions for revisions to the PFS 
locality structure. As discussed above, we did not propose changes to 
the PFS locality structure; we note that the update to the California 
Fee Schedule Areas discussed later in this section is the result of a 
statutory requirement. Additionally, we would like to note that, absent 
statutory provisions like those that pertain to California, changes to 
the locality configuration within a state would lead to significant 
redistributions in payments within that state. It has been our 
practice, and we have stated in previous rulemaking (72 FR 38139, and 
73 FR 38513), that we have not considered making changes to localities 
without the support of a State medical association(s) to demonstrate 
consensus for the change among the professionals whose payments would 
be affected (with some increasing and some decreasing). Also, we would 
like to clarify that, just as the localities under the Fee Schedule 
areas used in the PFS are comprised of one or more constituent 
counties, so are Metropolitan Statistical Areas. Therefore the concept 
of a payment cliff between neighboring counties as described by the 
commenter would not necessarily be mitigated by a change from PFS fee 
schedule areas to Metropolitan Statistical Areas.
    After consideration of the public comments received regarding the 
proposed CY 2017 GPCI data update, we are finalizing as proposed.
b. California Locality Update to the Fee Schedule Areas Used for 
Payment Under Section 220(h) of the Protecting Access to Medicare Act
(1) General Discussion and Legislative Change
    Section 220(h) of the PAMA added a new section 1848(e)(6) to the 
Act, that modifies the fee schedule areas used for payment purposes in 
California beginning in CY 2017.
    Currently, the fee schedule areas used for payment in California 
are based on the revised locality structure that was implemented in 
1997 as previously discussed. Beginning in CY 2017, section 
1848(e)(6)(A)(i) of the Act requires that the fee schedule areas used 
for payment in California must be Metropolitan Statistical Areas (MSAs) 
as defined by the Office of Management and Budget (OMB) as of December 
31 of the previous year; and section 1848(e)(6)(A)(ii) of the Act 
requires that all areas not located in an MSA must be treated as a 
single rest-of-state fee schedule area. The resulting modifications to 
California's locality structure would increase its number of localities 
from 9 under the current locality structure to 27 under the MSA-based 
locality structure.
    However, section 1848(e)(6)(D) of the Act defines transition areas 
as the fee schedule areas for 2013 that were the rest-of-state 
locality, and locality 3, which was comprised of Marin County, Napa 
County, and Solano County. Section 1848(e)(6)(B) of the Act specifies 
that the GPCI values used for payment in a transition area are to be 
phased in over 6 years, from 2017 through 2021, using a weighted sum of 
the GPCIs calculated under the new MSA-based locality structure and the 
GPCIs calculated under the current PFS locality structure. That is, the 
GPCI values applicable for these areas during this transition period 
are a blend of what the GPCI values would have been under the current 
locality structure, and what the GPCI values would be under the MSA-
based locality structure. For example, in the first year, CY 2017, the 
applicable GPCI values for counties that were previously in rest-of-
state or locality 3 and are now in MSAs are a blend of 1/6 of the GPCI 
value calculated for the year under the MSA-based locality structure, 
and 5/6 of the GPCI value calculated for the year under the current 
locality structure. The proportions shift by 1/6 in each subsequent 
year so that, by CY 2021, the applicable GPCI values for counties 
within transition areas are a blend of 5/6 of the GPCI value for the 
year under the MSA-based locality structure, and 1/6 of the GPCI value 
for the year under the current locality structure. Beginning in CY 
2022, the applicable GPCI values for counties in transition areas are 
the values calculated under the new MSA-based locality structure. For 
the sake of clarity, we reiterate that this incremental phase-in is 
only applicable to those counties that are in transition areas that are 
now in MSAs, which are only some of the counties in the 2013 California 
rest-of state locality and locality 3.
    Additionally, section 1848(e)(6)(C) of the Act establishes a hold 
harmless for transition areas beginning with CY 2017 whereby the 
applicable GPCI values for a year under the new MSA-based locality 
structure may not be less than what they would have been for the year 
under the current locality structure. There are a total of 58 counties 
in California, 50 of which are in transition areas as defined in 
section 1848(e)(6)(D) of the Act. Therefore, 50 counties in California 
are subject to the hold harmless provision. The other 8 counties, which 
are metropolitan counties that are not defined as transition areas, are 
not held harmless for the impact of the new MSA-based locality 
structure, and may therefore potentially experience slight decreases in 
their GPCI values as a result of the provisions in section 1848(e)(6) 
of the Act, insofar as the locality in which they are located now newly 
includes data from adjacent counties that decreases their GPCI values 
relative to those that would have applied had the new data not been 
incorporated. Therefore, the GPCIs for these eight counties under the 
MSA-based locality structure may be less than they would have been 
under the current GPCI structure. The eight counties that are not 
within transition areas are: Orange; Los Angeles; Alameda; Contra 
Costa; San Francisco; San Mateo; Santa Clara; and Ventura counties.
    We emphasize that while transition areas are held harmless from the 
impact of the GPCI changes using the new MSA-based locality structure, 
because we proposed other updates for CY 2017 as part of the eighth 
GPCI update, including the use of updated data, transition areas would 
still be subject to impacts resulting from those other updates. Table 
13 illustrates using GAFs, for CY 2017, the isolated impact of the MSA-
based locality changes and hold-harmless for transition areas required 
by section 1848(e)(6) of the Act, the impact of the use of updated data 
for GPCIs, and the combined impact of both of these changes.

[[Page 80266]]



    Table 13--Impact on California GAFs as a Result of Section 1848(e)(6) of the Act and Updated Data by Fee
                                                  Schedule Area
                                    [Sorted alphabetically by locality name]
----------------------------------------------------------------------------------------------------------------
                                                                                                       Combined
                                                      2017 GAF    % change                 % change    impact of
   Medicare fee schedule area    Transition   2016       w/o     due to new  2017 GAF  w/   due to     PAMA and
                                     area      GAF   1848(e)(6)   GPCI data   1848(e)(6)  1848(e)(6)   new GPCI
                                                                                                       data  (%)
----------------------------------------------------------------------------------------------------------------
Bakersfield....................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Chico..........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
El Centro......................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Fresno.........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Hanford-Corcoran...............           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Los Angeles-Long Beach-Anaheim            0   1.092       1.090       -0.18        1.091        0.09       -0.09
 (Los Angeles Cnty)............
Los Angeles-Long Beach-Anaheim            0   1.111       1.104       -0.63        1.101       -0.27       -0.90
 (Orange Cnty).................
Madera.........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Merced.........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Modesto........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Napa...........................           1   1.137       1.128       -0.79        1.128        0.00       -0.79
Oxnard-Thousand Oaks-Ventura...           0   1.089       1.083       -0.55        1.083        0.00       -0.55
Redding........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Rest of California.............           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Riverside-San Bernardino-                 1   1.036       1.031       -0.48        1.032        0.10       -0.39
 Ontario.......................
Sacramento-Roseville-Arden-               1   1.036       1.031       -0.48        1.031        0.00       -0.48
 Arcade........................
Salinas........................           1   1.036       1.031       -0.48        1.033        0.19       -0.29
San Diego-Carlsbad.............           1   1.036       1.031       -0.48        1.035        0.39       -0.10
San Francisco-Oakland-Hayward             0   1.124       1.125        0.09        1.142        1.51        1.60
 (Alameda/Contra Costa Cnty)
San Francisco-Oakland-Hayward             1   1.137       1.128       -0.79        1.129        0.09       -0.70
 (Marin Cnty)..................
San Francisco-Oakland-Hayward             0   1.191       1.194        0.25        1.175       -1.59       -1.34
 (San Francisco Cnty)..........
San Francisco-Oakland-Hayward             0   1.182       1.187        0.42        1.171       -1.35       -0.93
 (San Mateo Cnty)..............
San Jose-Sunnyvale-Santa Clara            1   1.036       1.031       -0.48        1.053        2.13        1.64
 (San Benito Cnty).............
San Jose-Sunnyvale-Santa Clara            0   1.175       1.176        0.09        1.175       -0.09        0.00
 (Santa Clara Cnty)............
San Luis Obispo-Paso Robles-              1   1.036       1.031       -0.48        1.031        0.00       -0.48
 Arroyo Grande.................
Santa Cruz-Watsonville.........           1   1.036       1.031       -0.48        1.042        1.07        0.58
Santa Maria-Santa Barbara......           1   1.036       1.031       -0.48        1.036        0.48        0.00
Santa Rosa.....................           1   1.036       1.031       -0.48        1.037        0.58        0.10
Stockton-Lodi..................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Vallejo-Fairfield..............           1   1.137       1.128       -0.79        1.128        0.00       -0.79
Visalia-Porterville............           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Yuba City......................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
----------------------------------------------------------------------------------------------------------------
Note: the Los Angeles-Long Beach-Anaheim; San Francisco-Oakland-Hayward; and San Jose-Sunnyvale-Santa Clara
  Medicare localities are represented at a sub-locality level for the purpose of demonstrating the variation of
  the GAF within the locality. The variation in the Los-Angeles-Long Beach-Anaheim locality exists only in CY
  2017 and results from the two-year 50/50 phase in of the GPCI. The GAF variation in San Francisco-Oakland-
  Hayward and San Jose-Sunnyvale-Santa Clara results from the localities containing both transition area and non-
  transition area counties. For the remainder of Medicare localities, the GAF is consistent throughout the
  entire locality.

    Additionally, for the purposes of calculating budget neutrality and 
consistent with the PFS budget neutrality requirements as specified 
under section 1848(c)(2)(B)(ii)(II) of the Act, we proposed to start by 
calculating the national GPCIs as if the current localities are still 
applicable nationwide; then for the purposes of payment in California, 
we override the GPCI values with the values that are applicable for 
California consistent with the requirements of section 1848(e)(6) of 
the Act. This approach is consistent with the implementation of the 
GPCI floor provisions that have previously been implemented--that is, 
as an after-the-fact adjustment that is implemented for purposes of 
payment after both the GPCIs and PFS budget neutrality have already 
been calculated.

(2) Operational Considerations

    As discussed above, under section 1848(e)(6) of the Act, counties 
that were previously in the rest-of-state locality or locality 3 and 
are now in MSAs would have their GPCI values under the new MSA-based 
locality structure phased in gradually, in increments of one-sixth over 
6 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1 
year has elapsed since the date of the last previous GPCI adjustment, 
the adjustment to be applied in the first year of the next adjustment 
shall be 1/2 of the adjustment that otherwise would be made. While 
section 1848(e)(6)(B) of the Act establishes a blended phase-in for the 
MSA-based GPCI values, it does not explicitly state whether or how that 
provision is to be reconciled with the requirement at section 
1848(e)(1)(C) of

[[Page 80267]]

the Act. We believe that since section 1848(e)(6)(A) of the Act 
requires that we must make the change to MSA-based fee schedule areas 
for California GPCIs notwithstanding the preceding provisions of 
section 1848(e) of the Act, and subject to the succeeding provisions of 
section 1848(e)(6) of the Act, that applying the two-year phase-in 
specified by the preceding provisions simultaneously with the six-year 
phase-in would undermine the incremental 6-year phase-in specified in 
section 1848(e)(6)(B) of the Act. Therefore, we proposed that the 
requirement at section 1848(e)(1)(C) of the Act to phase in 1/2 of the 
adjustment in year 1 of the GPCI update would not apply to counties 
that were previously in the rest-of-state or locality 3 and are now in 
MSAs, and therefore, are subject to the blended phase-in as described 
above. Since section 1848(e)(6)(B) of the Act provides for a gradual 
phase in of the GPCI values under the new MSA-based locality structure, 
specifically in one-sixth increments over 6 years, if we were to also 
apply the requirement to phase in 1/2 of the adjustment in year 1 of 
the GPCI update then the first year increment would effectively be one-
twelfth. We note that this issue is only of concern if more than 1 year 
has elapsed since the previous GPCI update, and would only be 
applicable through CY 2021 since, beginning in CY 2022, the GPCI values 
for such areas in an MSA would be fully based on the values calculated 
under the new MSA-based locality structure for California.
    As previously stated, the resulting modifications to California's 
locality structure increase its number of localities from 9 under the 
current locality structure to 27 under the MSA-based locality 
structure. However, both the current localities and the MSA-based 
localities are comprised of various component counties, and in some 
localities only some of the component counties are subject to the 
blended phase-in and hold harmless provisions required by section 
1848(e)(6)(B) and (C) of the Act. Therefore, the application of these 
provisions may produce differing GPCI values among counties within the 
same fee schedule area under the MSA-based locality structure. For 
example, the MSA-based San Jose-Sunnyvale-Santa Clara locality, is 
comprised of 2 constituent counties--San Benito County, and Santa Clara 
County. San Benito County is in a transition area (2013 rest-of-state), 
while Santa Clara County is not. Hence, although the counties are in 
the same MSA, the requirements of section 1848(e)(6)(B) and (C) of the 
Act may produce differing GPCI values for each county. To address this 
issue, we proposed to assign a unique locality number to the counties 
that would be impacted in the aforementioned manner. As a result, 
although the modifications to California's locality structure increase 
the number of localities from 9 under the current locality structure to 
27 under the MSA-based locality structure, for purposes of payment, the 
actual number of localities under the MSA-based locality structure 
would be 32 to account for instances where unique locality numbers are 
needed as described above. Additionally, while the fee schedule area 
names are consistent with the MSAs designated by OMB, we proposed to 
maintain 2-digit locality numbers to correspond to the existing fee 
schedule areas. Pursuant to the implementation of the new MSA-based 
locality structure for California, the total number of PFS localities 
would increase from 89 to 112. Table 14 displays the current fee 
schedule areas in California, and Table 15 displays the MSA-based fee 
schedule areas in California required by section 1848(e)(6) of the Act. 
Additional information on the California locality update may be found 
in our contractor's draft report, ``Draft Report on the CY 2017 Update 
of the Geographic Practice Cost Index for the Medicare Physician Fee 
Schedule,'' which is available on the CMS Web site. It is located under 
the supporting documents section of the CY 2017 PFS final rule located 
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.

           Table 14--Current Fee Schedule Areas in California
                [Sorted alphabetically by locality name]
------------------------------------------------------------------------
   Locality number        Fee schedule area             Counties
------------------------------------------------------------------------
26..................  Anaheim/Santa Ana.......  Orange.
18..................  Los Angeles.............  Los Angeles.
03..................  Marin/Napa/Solano.......  Marin, Napa, And Solano.
07..................  Oakland/Berkley.........  Alameda and Contra
                                                 Costa.
05..................  San Francisco...........  San Francisco.
06..................  San Mateo...............  San Mateo.
09..................  Santa Clara.............  Santa Clara.
17..................  Ventura.................  Ventura.
99..................  Rest of State...........  All Other Counties.
------------------------------------------------------------------------


                              Table 15--MSA-Based Fee Schedule Areas in California
                                    [Sorted alphabetically by locality name]
----------------------------------------------------------------------------------------------------------------
                                        New
     Current  locality  number       locality      Fee schedule area          Counties          Transition area
                                      number          (MSA name)
----------------------------------------------------------------------------------------------------------------
99................................          54  Bakersfield, CA.......  Kern................  YES.
99................................          55  Chico, CA.............  Butte...............  YES.
99................................          71  El Centro, CA.........  Imperial............  YES.
99................................          56  Fresno, CA............  Fresno..............  YES.
99................................          57  Hanford-Corcoran, CA..  Kings...............  YES.
18................................          18  Los Angeles-Long Beach- Los Angeles.........  NO.
                                                 Anaheim, CA (Los
                                                 Angeles County).
26................................          26  Los Angeles-Long Beach- Orange..............  NO.
                                                 Anaheim, CA (Orange
                                                 County).
99................................          58  Madera, CA............  Madera..............  YES.
99................................          59  Merced, CA............  Merced..............  YES.
99................................          60  Modesto, CA...........  Stanislaus..........  YES.
3.................................          51  Napa, CA..............  Napa................  YES.
17................................          17  Oxnard-Thousand Oaks-   Ventura.............  NO.
                                                 Ventura, CA.
99................................          61  Redding, CA...........  Shasta..............  YES.
99................................          75  Rest of State.........  All Other Counties..  YES.
99................................          62  Riverside-San           Riverside, And San    YES.
                                                 Bernardino-Ontario,     Bernardino.
                                                 CA.
99................................          63  Sacramento--Roseville-  El Dorado, Placer,    YES.
                                                 -Arden-Arcade, CA.      Sacramento, And
                                                                         Yolo.
99................................          64  Salinas, CA...........  Monterey............  YES.
99................................          72  San Diego-Carlsbad, CA  San Diego...........  YES.

[[Page 80268]]

 
7.................................           7  San Francisco-Oakland-  Alameda, Contra       NO.
                                                 Hayward, CA (Alameda    Costa.
                                                 County/Contra Costa
                                                 County).
3.................................          52  San Francisco-Oakland-  Marin...............  YES.
                                                 Hayward, CA (Marin
                                                 County).
5.................................           5  San Francisco-Oakland-  San Francisco.......  NO.
                                                 Hayward, CA (San
                                                 Francisco County).
6.................................           6  San Francisco-Oakland-  San Mateo...........  NO.
                                                 Hayward, CA (San
                                                 Mateo County).
99................................          65  San Jose-Sunnyvale-     San Benito..........  YES.
                                                 Santa Clara, CA (San
                                                 Benito County).
9.................................           9  San Jose-Sunnyvale-     Santa Clara.........  NO.
                                                 Santa Clara, CA
                                                 (Santa Clara County).
99................................          73  San Luis Obispo-Paso    San Luis Obispo.....  YES.
                                                 Robles-Arroyo Grande,
                                                 CA.
99................................          66  Santa Cruz-             Santa Cruz..........  YES.
                                                 Watsonville, CA.
99................................          74  Santa Maria-Santa       Santa Barbara.......  YES.
                                                 Barbara, CA.
99................................          67  Santa Rosa, CA........  Sonoma..............  YES.
99................................          73  Stockton-Lodi, CA.....  San Joaquin.........  YES.
3.................................          53  Vallejo-Fairfield, CA.  Solano..............  YES.
99................................          69  Visalia-Porterville,    Tulare..............  YES.
                                                 CA.
99................................          70  Yuba City, CA.........  Sutter, and Yuba....  YES.
----------------------------------------------------------------------------------------------------------------

    We received few comments regarding the California locality update 
to the fee schedule areas used for payment under section 220(h) of 
PAMA.
    Comment: One commenter stated that it supports the proposed 
California payment locality implementation plan. The commenter stated 
that based on its analysis the calculations are accurate except for a 
few errors. Specifically, the commenter stated that the CY 2016 GAFs 
for 3 fee schedule areas [Los Angeles-Long Beach-Anaheim (Orange 
County), San Francisco-Oakland-Hayward (Alameda/Contra Costa County), 
and San Francisco-Oakland-Hayward (San Francisco County)] in Table 13 
of the proposed rule (81 FR 46221 through 46222) were incorrect. The 
commenter also requested that all of the 2016 GAFs in the table be 
reported to three decimal places to avoid confusion with rounding. 
Additionally, the commenter indicated that Sierra County in California 
was missing from the CY 2017 Proposed GPCI County Data File in the CY 
2017 Proposed Rule GPCI Public Use Files available on our Web site 
under the supporting documents section of the CY 2017 PFS proposed rule 
Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    Response: We thank the commenter for its support of our proposed 
California payment locality implementation plan. With regard to the 
errors noted by the commenter, we thank the commenter for bringing this 
issue to our attention. We agree that the CY 2016 GAFs for Los Angeles-
Long Beach-Anaheim (Orange County), San Francisco-Oakland-Hayward 
(Alameda/Contra Costa County), and San Francisco-Oakland-Hayward (San 
Francisco County) were incorrect in Table 13 of the proposed rule, and 
have been corrected in Table 13 in this final rule. We have also 
updated all of the 2016 GAFs in Table 13 to reflect 3 decimal places as 
to avoid confusion with rounding as requested. Additionally, we note 
that while the GAFs for these 3 fee schedule areas were incorrect in 
Table 13 of the proposed rule, the GAF values were correct in Addendum 
D to the proposed rule available on our Web site under the supporting 
documents section of the CY 2017 PFS Proposed Rule Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. Moreover, GAF values are an analysis 
tool, and are not used to determine service level payment. 
Additionally, we note Sierra County was omitted from the CY 2017 
Proposed GPCI County Data File because we removed counties with 0 total 
RVUs in 2014. However, for the final rule we have revised the file to 
include all counties, even those with 0 total RVUs in 2014. The updated 
file can be viewed in the CY 2017 Final GPCI County Data File in the CY 
2017 Final Rule GPCI Public use files available on our Web site.
    Comment: One commenter requested that CMS implement the California 
locality update requirement in a manner that does not require the 
Medicare Administrative Contractor (MAC) for California to make changes 
to the enrollment process for physician groups in California or changes 
in the way that physician groups submit claims to the MAC.
    Response: While we note that there are several internal 
administrative burdens that result from the implementation of the 
California locality update, we do not believe there should be related 
burden on practitioners, and California practitioners will continue to 
follow the existing process for submitting claims.
    After consideration of the public comments received regarding the 
proposed California payment locality implementation plan, we are 
finalizing as proposed.
4. Update to the Methodology for Calculating GPCIs in the U.S. 
Territories
    In calculating GPCIs within U.S. states, we use county-level wage 
data from the Bureau of Labor Statistics (BLS) Occupational Employment 
Statistics Survey (OES), county-level residential rent data from the 
American Community Survey (ACS), and malpractice insurance premium data 
from state departments of insurance. In calculating GPCIs for the U.S. 
territories, we currently use three distinct methodologies--one for 
Puerto Rico, another for the Virgin Islands, and a third for the 
Pacific Islands (Guam, American Samoa, and Northern Marianas Islands). 
These three methodologies were adopted at different times based 
primarily on the data that were available at the time they were 
adopted. At present, because Puerto Rico is the only territory where 
county-level BLS OES, county-level ACS, and malpractice premium data 
are available, it is the only territory for which we use territory-
specific data to calculate GPCIs. For the Virgin Islands, because 
county-level wage and rent data are not available, and insufficient 
malpractice premium data are available, CMS has set the work, PE, and 
MP GPCI values for the Virgin Islands payment locality at the national 
average of 1.0 even though, like Puerto Rico, the Virgin Islands is its

[[Page 80269]]

own locality and county-level BLS OES data are available for the Virgin 
Islands. For the U.S. territories in the Pacific Ocean, we currently 
crosswalk GPCIs from the Hawaii locality for each of the three GPCIs, 
and incorporate no local data from these territories into the GPCI 
calculations even though county-level BLS OES data does exist for Guam, 
but not for American Samoa or the Northern Mariana Islands.
    As noted above, currently Puerto Rico is the only territory for 
which we calculate GPCIs using the territory-specific information 
relative to data from the U.S. States. For several years stakeholders 
in Puerto Rico have raised concerns regarding the applicability of the 
proxy data in Puerto Rico relative to their applicability in the U.S. 
states. We believe that these concerns may be consistent across island 
territories, but lack of available, appropriate data has made it 
difficult to quantify such variation in costs. For example, some 
stakeholders previously indicated that shipping and transportation 
expenses increase the cost of acquiring medical equipment and supplies 
in islands and territories relative to the mainland. While we have 
previously attempted to locate data sources specific to geographic 
variation in such shipping costs, we found no comprehensive national 
data source for this information (we refer readers to 78 FR 74387 
through 74388 for the detailed discussion of this issue). Therefore, we 
have not been able to quantify variation in costs specific to island 
territories in the calculation of the GPCIs.
    For all the island territories other than Puerto Rico, the lack of 
comprehensive data about unique costs for island territories has had 
minimal impact on GPCIs because we have used either the Hawaii GPCIs 
(for the Pacific territories) or used the unadjusted national averages 
(for the Virgin Islands). In an effort to provide greater consistency 
in the calculation of GPCIs given the lack of comprehensive data 
regarding the validity of applying the proxy data used in the States in 
accurately accounting for variability of costs for these island 
territories, we proposed to treat the Caribbean Island territories (the 
Virgin Islands and Puerto Rico) in a consistent manner. We proposed to 
do so by assigning the national average of 1.0 to each GPCI index for 
both Puerto Rico and the Virgin Islands. We did not propose any changes 
to the GPCI methodology for the Pacific Island territories (Guam, 
American Samoa, and Northern Marianas Islands) where we already 
consistently assign the Hawaii GPCI values for each of the three GPCIs. 
Additional information on the Proposed Update to the Methodology for 
Calculating GPCIs in the U.S. Territories may be found in our 
contractor's draft report, ``Draft Report on the CY 2017 Update of the 
Geographic Practice Cost Index for the Medicare Physician Fee 
Schedule,'' which is available on our Web site. It is located under the 
supporting documents section of the CY 2017 PFS final rule located at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    The following is a summary of the comments we received regarding 
the proposed update to the methodology for calculating GPCIs in the 
U.S. territories.
    Comment: Several commenters expressed support for CMS' proposal to 
assign the national average of 1.0 to each GPCI in Puerto Rico, stating 
that the physicians in Puerto Rico who treat patients enrolled in fee-
for-service Medicare will be reimbursed in a manner that more closely 
aligns with the manner in which physicians in the other U.S. 
territories are reimbursed, and better reflects the cost of practicing 
medicine in Puerto Rico. Other commenters supporting the proposal also 
suggested that there has been a need for revision of Medicare payment 
in Puerto Rico, and that the territories of the U.S. have not been 
treated similarly even though the territories are much alike. Another 
commenter stated that the existing fee schedule for Puerto Rico does 
not correlate with the cost of caring for patients, and that the 
proposed policy is long overdue. Some commenters also stated that 
increasing the GPCI's for Puerto Rico is an important and necessary 
first step in trying to salvage Puerto Rico's deteriorated health 
system.
    Response: We thank the commenters for their support.
    Comment: A few commenters requested that CMS consider raising the 
GPCI values in Puerto Rico to 1.25.
    Response: We proposed assigning the national average of 1.0 to each 
GPCI index for both Puerto Rico and the Virgin Islands, in an effort to 
provide greater consistency in the calculation of GPCIs among these 
island territories, given the lack of information on the validity of 
applying the proxy data used in the States to accurately account for 
variability of costs in these territories as compared to the national 
average costs. Ultimately we proposed to treat the Caribbean Island 
territories (the Virgin Islands and Puerto Rico) in a consistent manner 
by assigning the national average of 1.0 to each GPCI index. We do not 
believe that it would be appropriate to raise the value to 1.25 in the 
absence of data demonstrating that would be an accurate reflection of 
costs in those territories relative to national average costs.
    Comment: We received several comments that are outside of the scope 
of the Physician Fee Schedule, requesting that CMS explore every option 
to determine whether a one-time correction can be made to the Medicare 
Advantage (MA) regulatory cycle so that the per-person monthly payment 
to Puerto Rico MA Plans in CY 2017 will reflect the increase to the 
fee-for-service spending in the territory as a result of the proposed 
GPCI increase. Some commenters stated that it is imperative that CMS 
see that the increased physician fees reach the actual providers and 
are not diverted away from patient care by third parties such as 
Medicare Advantage Organizations. Some commenters requested that CMS 
clarify that the new GPCIs will be incorporated into the MA benchmarks 
in CY 2018.
    Response: We appreciate the concerns raised by the commenters. 
Consistent with the statute, we published the final CY 2017 Rate 
Announcement for Medicare Advantage on April 4, 2016. Medicare 
Advantage actuarial bids and benefit packages for 2017 have been 
approved by CMS and sponsors have begun marketing plan to 
beneficiaries. Thus, a change in to CY 2017 benchmark would be 
disruptive to beneficiaries. In future years, including CY 2018, we 
will follow our normal process for calculating rates. This process 
incorporates historical Fee for Service expenditures, which would 
include any updates to Fee for Service payment rates, such as an 
adjustment to the Puerto Rico GPCI. CMS will not be making any 
adjustments to CY 2017 Medicare Advantage rates as a result of this 
final rule. Finally, we note that according to the statute, we are 
prohibited from interfering or directing the contracting between 
Medicare Advantage Organizations (MAOs) and contracted providers. As 
such, we are not permitted to dictate to MAOs how any increase in 
payment rates can be spent, including on provider rates.
    Comment: One commenter suggested that if the MA benchmark cannot be 
adjusted for CY 2017 that CMS should postpone the applicability of the 
GPCI change in Puerto Rico until CY 2018 when such an effect is also 
reflected in the MA benchmarks.
    Response: We do not agree that the proposal to update to the 
methodology for calculating GPCIs in the U.S. territories, which will 
provide greater consistency in the calculation of GPCIs for these 
areas, should be delayed based on when the MA benchmarks will

[[Page 80270]]

reflect the increases as a result of this policy.
    After consideration of the public comments received regarding our 
proposal to treat the Caribbean Island territories (the Virgin Islands 
and Puerto Rico) in a consistent manner, by assigning the national 
average of 1.0 to each GPCI index for both Puerto Rico and the Virgin 
Islands, we are finalizing as proposed.
5. Refinement to the MP GPCI Methodology
    In the process of calculating MP GPCIs for the purposes of this 
final rule, we identified several technical refinements to the 
methodology that yield improvements over the current method. We also 
proposed refinements that conform to our proposed methodology for 
calculating the GPCIs for the U.S. Territories described above. 
Specifically, we proposed modifications to the methodology to account 
for missing data used in the calculation of the MP GPCI. Under the 
methodology used in the CY 2014 GPCI update (78 FR 74380 through 
74391), we first calculated the average premiums by insurer and 
specialty, then imputed premium values for specialties for which we did 
not have specific data, before adjusting the specialty-specific premium 
data by market share weights. We proposed to revise our methodology to 
instead calculate the average premiums for each specialty using issuer 
market share for only available companies. This proposed methodological 
improvement would reduce potential bias resulting from large amounts of 
imputation, an issue that is prevalent for insurers that only write 
policies for ancillary specialties for which premiums tend to be low. 
The current method would impute the low premiums for ancillary 
specialties across the remaining specialties, and generally greater 
imputation leads to less accuracy. Additional information on the MP 
GPCI methodology, and the proposed refinement to the MP GPCI 
methodology may be found in our contractor's draft report, ``Draft 
Report on the CY 2017 Update of the Geographic Practice Cost Index for 
the Medicare Physician Fee Schedule,'' which is available on our Web 
site. It is located under the supporting documents section of the CY 
2017 PFS final rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    We did not receive any comments regarding the proposed technical 
refinements to the MP GPCI methodology, and we are finalizing as 
proposed.

J. Payment Incentive for the Transition From Traditional X-Ray Imaging 
to Digital Radiography and Other Imaging Services

    Section 502(a)(1) of Division O, Title V of the Consolidated 
Appropriations Act, 2016 (Pub. L. 114-113) amended section 1848(b) of 
the Act by adding new paragraph (b)(9). Effective for services 
furnished on or after January 1, 2017, section 1848(b)(9)(A) of the Act 
reduces by 20 percent the payment amounts under the PFS for the 
technical component (TC) (including the TC portion of a global 
services) of imaging services that are X-rays taken using film. The 
reduction is made prior to any other adjustment under this section and 
without application of this new paragraph.
    Section 1848(b)(9) of the Act allows for the implementation of the 
payment reduction through appropriate mechanisms which may include use 
of modifiers. In accordance with section 1848(c)(2)(B)(v)(X), the 
adjustments under section 1848(b)(9)(A) of the Act are exempt from 
budget neutrality.
    To implement this provision, in the CY 2017 PFS proposed rule (81 
FR 46224), we proposed to establish a new modifier to be used on claims 
that include imaging services that are X-rays (including the imaging 
portion of a service) taken using film. Since the display of the 
proposed rule, modifier FX has been established for that purpose. 
Effective January 1, 2017, the modifier must be used on claims for X-
rays that are taken using film. The use of this modifier will result in 
a 20 percent reduction for the X-ray service, as specified under 
section 1848(b)(9)(A) of the Act.
    The proposed rule preamble stated that the applicable HCPCS codes 
describing imaging services that are X-ray services could be found on 
the PFS Web site. However, we did not intend this to indicate that we 
would be developing or displaying an exhaustive list of applicable 
codes. Instead, we intended to refer to the several lists of PFS 
imaging codes, including those that describe imaging services that are 
X-rays.
    Comment: Many commenters commented on the merits of the statutory 
provision. The commenters stated that the reduction of Medicare film-
based x-ray payments by 20 percent will have unintended consequences on 
patient care.
    Response: We believe our proposal would implement the required 
statutory provision and we do not believe that we have the authority to 
alter the application of the provision based on these comments.
    Comment: An overwhelming majority of the commenters requested CMS 
implement an alternative policy to improve quality of imaging services. 
The recommended policy would require registered radiologic technicians 
to perform all Medicare film or digital radiography procedures. Other 
commenters countered this recommended alternative by stating that it 
would exclude otherwise qualified professionals who have undergone 
education to acquire limited scope licenses or certification programs 
demonstrating As Low As Reasonably Achievable (ALARA) safety practices 
by either a third party, vendor training, or another didactic course 
deemed acceptable by any of the four accreditation organizations. One 
commenter also referenced 35 states that have an entry level 
certification for X-ray technicians and that throughout the US, there 
are x-ray technicians and limited scope X-ray machine operators that 
are also licensed and certified.
    Response: We appreciate commenters' interests in standards that 
might improve quality of care for Medicare beneficiaries, but we did 
not propose a policy regarding standards for radiologic technicians in 
the proposed rule. Also, as previously stated, we do not believe we 
have the authority to implement conditions of payment regarding 
radiologic technicians as an alternative to the adjustments required by 
the statutory provision.
    Comment: A commenter recommended that a financial incentive be 
provided for physicians to convert to digital machines as had been done 
in the case of electronic medical records.
    Response: The legislation does not authorize any financial 
incentive in the form of increased payment, but provides an incentive 
to use digital images to avoid the 20 percent reduction that applies to 
imaging services that are X-rays taken using film.
    Comment: One commenter requested that in the absence of a 
meaningful opportunity to comment on the list of codes for which the 
policy applies, the provision should be limited to traditional 
diagnostic X-ray procedures only. Two commenters presented separate 
lists of codes for which the payment reduction should apply. One 
commenter also provided codes that should be explicitly excluded from 
the payment reduction, for example, radiographic-fluoroscopic, vascular 
and mammography X-ray imaging services, radioscopic, radioscopic and 
radiography services provided in a

[[Page 80271]]

single examination. Other commenters also provided a list of procedures 
that should be excluded. The commenter also requested that we publish 
the list of applicable codes as soon as possible.
    Response: As previously stated, we did not publish an exhaustive 
list of applicable codes, and previously intended to point to existing 
lists of PFS imaging services. We believe that physicians and non-
physician practitioners are in the best position to determine whether a 
particular imaging service is an X-ray taken using film.
    Comment: One commenter suggested that if at least half of the 
number of discrete X-ray exposures required for the radiographic exam 
are captured using a DR detector, then the examination should be 
considered as digital and the payment differential should not be 
applied. Another commenter requested that we clarify that the law only 
applies (and requires use of a modifier) to sites that use X-ray as a 
single method for image capture. The commenter also seeks clarification 
that if a site uses both X-ray film and electronic capture of images 
and maintains digital archives, by a picture archiving communication 
system or other electronic method, that the site is not required to 
report the modifier.
    Response: At this time, in accordance with the statute, we are 
requiring the FX modifier to be used whenever an imaging service is an 
X-ray taken using film. As stated, the statute requires that if an 
imaging service is an X-ray taken using film, a reduction in payment is 
to occur. The statutory requirement applies at the service level, not 
based on where the service is furnished or the method used to store 
images. There is no provision for an exception to the payment reduction 
based on the availability of various technologies or the use of certain 
image archiving technology at a particular site.
    After consideration of the public comments we received, we are 
finalizing the establishment of new modifier ``FX'' to be reported on 
claims for imaging services that are X-rays that are taken using film.
    Beginning January 1, 2017, claims for imaging services that are X-
rays taken using film must include the modifier ``FX.''
    The use of this modifier will result in a 20 percent reduction for 
the X-ray service, as specified under section 1848(b)(9)(A) of the Act.

K. Procedures Subject to the Multiple Procedure Payment Reduction 
(MPPR) and the OPPS Cap

    Effective January 1, 2012, we implemented an MPPR of 25 percent on 
the professional component (PC) of advanced imaging services. The 
reduction applies when multiple imaging procedures are furnished by the 
same physician (or physician in the same group practice) to the same 
patient, in the same session, on the same day. Full payment is made for 
the PC of the highest priced procedure. Payment for the PC of 
subsequent services is reduced by 25 percent.
    Section 502(a)(2)(A) of Division O, Title V of the Consolidated 
Appropriations Act, 2016 (Pub. L. 114-113, enacted on December 18, 
2015) added a new section 1848(b)(10) of the Act which revises the 
payment reduction from 25 percent to 5 percent, effective January 1, 
2017. Section 502(a)(2)(B) added a new subclause at section 
1848(c)(2)(B)(v)(XI) which exempts the reduced expenditures 
attributable to the revised 5 percent MMPR on the PC of imaging from 
the PFS budget neutrality provision. We proposed to implement these 
provisions for services furnished on or after January 1, 2017. We refer 
readers to section VI.C of this final rule regarding the necessary 
adjustment to the proposed PFS conversion factor to account for the 
mandated exemption from PFS budget neutrality.
    We note that the lists of services for the upcoming calendar year 
that are subject to the MPPR on diagnostic cardiovascular services, 
diagnostic imaging services, diagnostic ophthalmology services, and 
therapy services; and the list of procedures that meet the definition 
of imaging under section 5102(b) of the Deficit Reduction Act (DRA), 
and therefore, are subject to the OPPS cap, are displayed in the public 
use files for the PFS proposed and final rules for each year. The 
public use files for CY 2017 are available on our Web site under 
downloads for the CY 2017 PFS final rule with comment period at http://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html.
    Comment: Commenters supported the proposal to implement the 
statutory provision.
    Response: We our finalizing our CY 2017 proposal to revise the MPPR 
on the PC of diagnostic imaging services.

L. Valuation of Specific Codes

1. Background: Process for Valuing New, Revised, and Potentially 
Misvalued Codes
    Establishing valuations for newly created and revised CPT codes is 
a routine part of maintaining the PFS. Since inception of the PFS, it 
has also been a priority to revalue services regularly to make sure 
that the payment rates reflect the changing trends in the practice of 
medicine and current prices for inputs used in the PE calculations. 
Initially, this was accomplished primarily through the 5-year review 
process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 
2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 
2011. Under the 5-year review process, revisions in RVUs were proposed 
and finalized via rulemaking. In addition to the 5-year reviews, 
beginning with CY 2009, CMS and the RUC have identified a number of 
potentially misvalued codes each year using various identification 
screens, as discussed in section II.D.4 of this final rule. 
Historically, when we received RUC recommendations, our process had 
been to establish interim final RVUs for the potentially misvalued 
codes, new codes, and any other codes for which there were coding 
changes in the final rule for a year. Then, during the 60-day period 
following the publication of the final rule, we accepted public comment 
about those valuations. For services furnished during the calendar year 
following the publication of interim final rates, we paid for services 
based upon the interim final values established in the final rule. In 
the final rule with comment period for the subsequent year, we 
considered and responded to public comments received on the interim 
final values, and typically made any appropriate adjustments and 
finalized those values.
    In the CY 2015 PFS final rule with comment period, we finalized a 
new process for establishing values for new, revised and potentially 
misvalued codes. Under the new process, we include proposed values for 
these services in the proposed rule, rather than establishing them as 
interim final in the final rule with comment period. Beginning with the 
CY 2017 proposed rule, the new process is applicable to all codes, 
except for new codes that describe truly new services. For CY 2017, we 
proposed new values in the CY 2017 proposed rule for the vast majority 
of new, revised, and potentially misvalued codes for which we received 
complete RUC recommendations by February 10, 2016. To complete the 
transition to this new process, for codes where we established interim 
final values in the CY 2016 PFS final rule with comment period, we 
reviewed the comments received during the 60-day public comment period 
following release of the CY 2016 PFS final rule with comment period, 
and re-proposed

[[Page 80272]]

values for those codes in the CY 2017 proposed rule.
    We considered public comments received during the 60-day public 
comment period for the proposed rule before establishing final values 
in this final rule. As part of our established process we will adopt 
interim final values only in the case of wholly new services for which 
there are no predecessor codes or values and for which we do not 
receive recommendations in time to propose values. For CY 2017, we are 
not aware of any new codes that describe such wholly new services. 
Therefore, we are not establishing any code values on an interim final 
basis. However, we remind stakeholders that we continually review 
stakeholder information regarding the valuation of codes under the 
potentially misvalued code initiative and, under our existing process, 
could consider proposing any particular changes as early as CY 2018 
rulemaking.
2. Methodology for Proposing Work RVUs
    We conduct a review of each code identified in this section and 
review the current work RVU (if any), RUC-recommended work RVU, 
intensity, time to furnish the preservice, intraservice, and 
postservice activities, as well as other components of the service that 
contribute to the value. Our review of recommended work RVUs and time 
inputs generally includes, but is not limited to, a review of 
information provided by the RUC, HCPAC (Health Care Professionals 
Advisory Committee), and other public commenters, medical literature, 
and comparative databases, as well as a comparison with other codes 
within the PFS, consultation with other physicians and health care 
professionals within CMS and the federal government, as well as 
Medicare claims data. We also assess the methodology and data used to 
develop the recommendations submitted to us by the RUC and other public 
commenters and the rationale for the recommendations. In the CY 2011 
PFS final rule with comment period (75 FR 73328 through 73329), we 
discussed a variety of methodologies and approaches used to develop 
work RVUs, including survey data, building blocks, crosswalks to key 
reference or similar codes, and magnitude estimation (see the CY 2011 
PFS final rule with comment period for more information). When 
referring to a survey, unless otherwise noted, we mean the surveys 
conducted by specialty societies as part of the formal RUC process. The 
building block methodology is used to construct, or deconstruct, the 
work RVU for a CPT code based on component pieces of the code.
    Components used in the building block approach may include 
preservice, intraservice, or postservice time and post-procedure 
visits. When referring to a bundled CPT code, the building block 
components could be the CPT codes that make up the bundled code and the 
inputs associated with those codes. Magnitude estimation refers to a 
methodology for valuing work that determines the appropriate work RVU 
for a service by gauging the total amount of work for that service 
relative to the work for a similar service across the PFS without 
explicitly valuing the components of that work. In addition to these 
methodologies, we have frequently utilized an incremental methodology 
in which we value a code based upon its incremental difference between 
another code or another family of codes. The statute specifically 
defines the work component as the resources in time and intensity 
required in furnishing the service. Also, the published literature on 
valuing work has recognized the key role of time in overall work. For 
particular codes, we refine the work RVUs in direct proportion to the 
changes in the best information regarding the time resources involved 
in furnishing particular services, either considering the total time or 
the intraservice time.
    Several years ago, to aid in the development of preservice time 
recommendations for new and revised CPT codes, the RUC created 
standardized preservice time packages. The packages include preservice 
evaluation time, preservice positioning time, and preservice scrub, 
dress and wait time. Currently there are six preservice time packages 
for services typically furnished in the facility setting, reflecting 
the different combinations of straightforward or difficult procedure, 
straightforward or difficult patient, and without or with sedation/
anesthesia. Currently, there are three preservice time packages for 
services typically furnished in the nonfacility setting, reflecting 
procedures without and with sedation/anesthesia care.
    We have developed several standard building block methodologies to 
value services appropriately when they have common billing patterns. In 
cases where a service is typically furnished to a beneficiary on the 
same day as an E/M service, we believe that there is overlap between 
the two services in some of the activities furnished during the 
preservice evaluation and postservice time. Our longstanding 
adjustments have reflected a broad assumption that at least one-third 
of the work time in both the preservice evaluation and postservice 
period is duplicative of work furnished during the E/M visit.
    Accordingly, in cases where we believe that the RUC has not 
adequately accounted for the overlapping activities in the recommended 
work RVU and/or times, we adjust the work RVU and/or times to account 
for the overlap. The work RVU for a service is the product of the time 
involved in furnishing the service multiplied by the intensity of the 
work. Preservice evaluation time and postservice time both have a long-
established intensity of work per unit of time (IWPUT) of 0.0224, which 
means that 1 minute of preservice evaluation or postservice time 
equates to 0.0224 of a work RVU.
    Therefore, in many cases when we remove 2 minutes of preservice 
time and 2 minutes of postservice time from a procedure to account for 
the overlap with the same day E/M service, we also remove a work RVU of 
0.09 (4 minutes x 0.0224 IWPUT) if we do not believe the overlap in 
time has already been accounted for in the work RVU. The RUC has 
recognized this valuation policy and, in many cases, now addresses the 
overlap in time and work when a service is typically furnished on the 
same day as an E/M service.
    We note that many commenters and stakeholders have expressed 
concerns with our ongoing adjustment of work RVUs based on changes in 
the best information we have regarding the time resources involved in 
furnishing individual services. We are particularly concerned with the 
RUC's and various specialty societies' objections to our approach given 
the significance of their recommendations to our process for valuing 
services and since much of the information we have used to make the 
adjustments is derived from their survey process. As explained in the 
CY 2016 PFS final rule with comment period (80 FR 70933), we recognize 
that adjusting work RVUs for changes in time is not always a 
straightforward process, so we apply various methodologies to identify 
several potential work values for individual codes. However, we want to 
reiterate that we are statutorily obligated to consider both time and 
intensity in establishing work RVUs for PFS services.
    We have observed that for many codes reviewed by the RUC, final 
recommended work RVUs appear to be incongruous with recommended 
assumptions regarding the resource costs in time. This is the case for 
a significant portion of codes for which we have recently established 
or proposed work RVUs that are based on

[[Page 80273]]

refinements to the RUC-recommended values. When we have adjusted work 
RVUs to account for significant changes in time, we begin by looking at 
the change in the time in the context of the RUC-recommended work RVU. 
When the recommended work RVUs do not appear to account for significant 
changes in time, we employ the different approaches to identify 
potential values that reconcile the recommended work RVUs with the 
recommended time values. Many of these methodologies, such as survey 
data, building blocks, crosswalks to key reference or similar codes, 
and magnitude estimation have long been used in developing work RVUs 
under the PFS. In addition to these, we sometimes use the relationship 
between the old time values and the new time values for particular 
services to identify alternative work RVUs based on changes in time 
components.
    In so doing, rather than ignoring the RUC-recommended value, we are 
using the recommended values as a starting reference and then applying 
one of these several methodologies to account for the reductions in 
time that we believe have not otherwise been reflected in the RUC-
recommended value. When we believe that such changes in time have 
already been accounted for in the RUC recommendation, then we do not 
make such adjustments. Likewise, we do not arbitrarily apply time 
ratios to current work RVUs to calculate proposed work RVUs. We use the 
ratios to identify potential work RVUs and consider these work RVUs as 
potential options relative to the values developed through other 
options.
    We clarify that we are not implying that the decrease in time as 
reflected in survey values must equate to a one-to-one or linear 
decrease in newly valued work RVUs. Instead, we believe that, since the 
two components of work are time and intensity, absent an obvious or 
explicitly stated rationale for why the relative intensity of a given 
procedure has increased, significant decreases in time should be 
reflected in decreases to work RVUs. If the RUC recommendation has 
appeared to disregard or dismiss the changes in time, without a 
persuasive explanation of why such a change should not be accounted for 
in the overall work of the service, then we generally use one of the 
aforementioned referenced methodologies to identify potential work 
RVUs, including the methodologies intended to account for the changes 
in the resources involved in furnishing the procedure.
    Several commenters, including the RUC, in general have objected to 
our use of these methodologies and deemed our actions in adjusting the 
recommended work RVUs as inappropriate. We received several specific 
comments regarding this issue in response to the CY 2016 PFS final rule 
with comment period and those comments are summarized below.
    Comment: Several commenters, including the RUC, stated that our 
methodology for adjusting work RVUs appears to be contrary to the 
statute.
    Response: We disagree with these comments. Since section 
1848(c)(1)(A) of the Act explicitly identifies time as one of the two 
types of resources that encompass the work component of the PFS 
payment, we do not believe that our use of the aforementioned 
methodologies to adjust the work RVU to account for the changes in 
time, which is one of the resources involved, is inconsistent with the 
statutory requirements related to the maintenance of work RVUs, and we 
have regularly used these and other methodologies in developing values 
for PFS services. In selecting which methodological approach will best 
determine the appropriate value for a service, we consider the current 
and recommended work and time values, as well as the intensity of the 
service, all relative to other services. In our review of RUC 
recommended values, we have observed that the RUC also uses a variety 
of methodologies to develop work RVUs for individual codes, and 
subsequently validates the results of these approaches through 
magnitude estimation or crosswalk to established values for other 
codes.
    Comment: Several commenters, including the RUC, stated that we 
could not take one element of the services that has changed such as 
intra-service time, and apply an overall ratio for reduction to the 
work RVU based on changes to time, as that renders the value no longer 
resource-based in comparison to the RUC-recommended values.
    Response: We disagree with the commenters and continue to believe 
that the use of time ratios is one of several reasonable methods for 
identifying potential work RVUs for particular PFS services, 
particularly when the alternative values do not account for information 
that suggests the amount of time involved in furnishing the service has 
changed significantly. We reiterate that, consistent with the statute, 
we are required to value the work RVU based on the relative resources 
involved in furnishing the service, which include time and intensity. 
When our review of recommended values determines that changes in the 
resource of time have been unaccounted for in a recommended RVU, then 
we believe we have the obligation to account for that change in 
establishing work RVUs since the statute explicitly identifies time as 
one of the two elements of the work RVUs. We recognize that it would 
not be appropriate to develop work RVUs solely based on time given that 
intensity is also an element of work, but in applying the time ratios 
we are using derived intensity measures based on current work RVUs for 
individual procedures. Were we to disregard intensity altogether, the 
work RVUs for all services would be developed based solely on time 
values and that is definitively not the case. Furthermore, we reiterate 
that we use time ratios to identify potential work RVUs, and then use 
other methods (including estimates of work from CMS medical personnel 
and crosswalks to key reference or similar codes) to validate these 
RVUs. We also disagree with several commenters' implications that a 
work RVU developed through such estimation methods is only resource-
based through the RUC process.
    Comment: Several commenters, including the RUC, stated that our 
inconsistent use of the time ratio methodology has rendered it 
ineffective for valuation purposes and that by choosing the starting 
base work value and/or physician time at random, we are essentially 
reverse engineering the work value we want under the guise of a 
standard algorithm.
    Response: We do not choose a starting base work value and/or 
physician time at random as suggested by the commenters. We use the RUC 
recommended values or the existing values as the base values; 
essentially, we are taking one of those values and applying adjustments 
to account for the change in time that based on our analysis of the RUC 
recommendation, we determine has not been properly accounted for to 
determine an appropriate work RVU. In circumstances where adjustments 
to time and the corresponding work RVU are relatively congruent or 
persuasively explained, our tendency has been to use those values as 
recommended. Where the RUC recommendations do not account for changes 
in time, we have made changes to RUC-recommended values to account for 
the changes in time.
    Comment: Commenters, including the RUC, also stated that the use of 
time ratio methodologies distills the valuation of the service into a 
basic formula with the only variable being either the new total 
physician time or the new intra-service physician time, and that these 
methodologies are based

[[Page 80274]]

on the incorrect assumption that the per minute physician work 
intensity established is permanent regardless of when the service was 
last valued. Other commenters have suggested that previous assumed 
times are inaccurate.
    Response: We agree with commenters that per minute intensity for a 
given service may change over time. If we believed that the per-minute 
intensity for a given service were immutable, then a reverse-building 
block approach to revaluation based on new time data could be 
appropriate. However, we have not applied such an approach specifically 
because we agree that the per-minute intensity of work is not 
necessarily static over time or even necessarily during the course of a 
procedure. Instead, we utilize time ratios to identify potential values 
that account for changes in time and compare these values to other PFS 
services for estimates of overall work. When the values we develop 
reflect a similar derived intensity, we agree that our values are the 
result of our assessment that the relative intensity of a given service 
has remained similar.
    Regarding the validity of comparing new times to the old times, we, 
too, hope that time estimates have improved over many years especially 
when many years have elapsed since the last time the service in 
question was valued. However, we also believe that our operating 
assumption regarding the validity of the pre-existing values as a point 
of comparison is critical to the integrity of the relative value system 
as currently constructed. Pre-existing times are a very important 
element in the allocation of indirect PE RVUs by specialty, and had the 
previously recommended times been overestimated, the specialties that 
furnish such services would be benefitting from these times in the 
allocation of indirect PE RVUs. As long time observers of the RUC 
process, we also recognize that the material the RUC uses to develop 
overall work recommendations includes the data from the surveys about 
time. We have previously stated concerns regarding the validity of much 
of the RUC survey data. However, we believe additional kinds of concern 
would be warranted if the RUC itself were operating under the 
assumption that its pre-existing data were typically inaccurate.
    We understand stakeholders' concerns regarding how best to consider 
changes in time in improving the accuracy of work RVUs and have 
considered all of the issues raised by commenters. In conjunction with 
our review of recommended code values for CY 2017, we conducted a 
preliminary analysis to identify general tendencies in the relationship 
between changes in time and changes in work RVUs for CY 2014 and CY 
2015. We looked at services for which there were no coding changes to 
simplify the analysis. The intent of this preliminary analysis was to 
examine commenters' beliefs that CMS is only considering time when 
making refinements to RUC recommended work values. For CY 2014, we 
found that in the aggregate, the average difference between the RUC 
recommended intraservice time and existing intraservice time was -17 
percent, but the average difference between the RUC recommended work 
RVU and existing work RVU was only -4 percent. However, the average 
difference between the CMS refined work RVU and existing work RVU was -
7 percent. For CY 2015, the average difference between the RUC 
recommended intraservice time and existing intraservice time was -17 
percent, but the average difference between the RUC recommended work 
RVU and existing work RVU was 1 percent, and the average difference 
between the CMS refined work RVU and existing work RVU was -6 percent. 
This preliminary analysis demonstrates that we are not making 
refinements solely in consideration of time, if that were the case, the 
changes in the work RVU values that we adopted would be comparable to 
the changes in the time that we adopted, but that is not the case.
    We believe that we should account for efficiencies in time when the 
recommended work RVU does not account for those efficiencies, otherwise 
relativity across the PFS can be significantly skewed over periods of 
time. For example, if when a code is first valued, a physician was 
previously able to do only 5 procedures per day, but due to new 
technologies, the same physician can now do 10 procedures per day, 
resource costs in time have empirically been lessened, and we believe 
that relative reduction in resources involved in furnishing that 
service should be accounted for in the assignment of work RVUs for that 
service, since the statute explicitly identifies time as one of the two 
components of work. Of course, if more resource intensive technology 
has allowed for the increased efficiency in furnishing the procedure, 
then the nonfacility PE RVUs for the service should also be adjusted to 
account for this change. Additionally, we believe it may be that the 
intensity per minute of the procedure may have changed with the greater 
efficiency in time. Again, that is why we do not generally reduce work 
RVUs in strict proportion to changes in time. We understand that 
intensity is not entirely linear, and that data related to time as 
obtained in the RUC survey instrument may improve over time, and that 
the number of survey respondents may improve over time. However, we 
also understand time as a tangible resource cost in furnishing PFS 
services, and a cost that by statute, is one of the two kinds of 
resources to be considered as part of the work RVU.
    Therefore, in the proposed rule, we stated that we were interested 
in receiving comments on whether, within the statutory confines, there 
are alternative suggestions as to how changes in time should be 
accounted for when it is evident that the survey data and/or the RUC 
recommendation regarding the overall work RVU does not reflect 
significant changes in the resource costs of time for codes describing 
PFS services. We solicited comment on potential alternatives, including 
the application of the reverse building block methodology, to making 
the adjustments that would recognize overall estimates of work in the 
context of changes in the resource of time for particular services.
    The following is a summary of the comments we received in response 
to our solicitation regarding potential alternatives, including the 
application of the reverse building block methodology, to making the 
adjustments that would recognize overall estimates of work in the 
context of changes in the resource of time for particular services.
    Comment: One commenter stated that it continues to support CMS in 
its efforts to adjust work RVUs commensurate with changes in intra-
service and total time, as well as post-operative visits despite RUC 
recommendations to the contrary. The commenter agreed with our changes 
and encouraged CMS to continue to identify and address such 
incongruities. The commenter stated that it is routine to encounter 
recommended decreases in physician time and/or post-procedure visits 
combined with RUC recommendations to maintain or increase the work 
RVUs. The commenter agreed that when physician time decreases, 
physician work should decrease comparatively, absent a compelling 
argument that the intensity of the service has increased sufficiently 
to offset the decrease in physician time. The commenter did not have 
alternative suggestions for how CMS should make these adjustments, and 
believes the approaches that CMS has taken are reasonable and 
defensible.
    Another commenter stated that it appreciates that CMS provided

[[Page 80275]]

information about how it reviews recommendations for work RVUs that 
come from the RUC. Additionally, one commenter stated appreciation for 
the consideration and effort that CMS gives in valuing the work RVUs 
for a service. The commenter stated that the accuracy of RVU estimates 
has improved as a result of CMS' various validation processes for 
collecting data and its consideration of feedback from the RUC and 
public commenters. The commenter stated that CMS should account for 
efficiencies in the resource costs of time when the recommended work 
RVU does not account for emerging efficiencies, such as advances in 
surgical techniques, and that by considering time in these situations, 
CMS will be able to effectively adjust both emerging technological 
trends and their impact on resource costs needed to deliver care to 
beneficiaries.
    Response: We appreciate the commenters' support for our ongoing 
adjustment of work RVUs based on changes in the best information we 
have regarding the time resources involved in furnishing individual 
services. We also agree that CMS should account for efficiencies in the 
resource costs of time, as indicated by one commenter, and will 
endeavor to do so when we consider the work RVU and how the effect of 
advancements such as emerging technology and improvements in surgical 
techniques impact the resource costs of time.
    Comment: A few commenters, including the RUC, stated that all 
adjustments to work RVUs should be solely based on the resources 
involved in performing each procedure or service. The commenters stated 
that all adjustments to work RVUs should either be work neutral to the 
family or result in budget neutral adjustment to the conversion factor, 
and that broadly redistributing work RVUs would distort the relative 
value system and create unintended consequences.
    Response: We agree that adjustments to work RVUs should be based on 
the resources involved with each procedure or service, and consistent 
with the statute, the work RVUs should reflect the relative resources 
costs of time and intensity. We also agree with the commenter regarding 
how changes in work RVUs affect PFS relativity. We have a long-standing 
practice of making an adjustment to the CF to account for increases or 
decreases in work RVUs across the PFS instead of scaling the work RVUs 
to maintain overall relativity. The practical effect of a positive 
adjustment to the CF is that the value of a single work RVU is greater 
than it previously had been. In other words, the relative value of the 
other work RVUs has increased, across the PFS, whenever we apply a 
positive budget neutrality adjustment to the CF to account for an 
overall decrease in work RVUs.
    Comment: A few commenters, including the RUC, stated that they 
appreciate CMS agreeing with the RUC's assertion that the usage of time 
ratios to reduce work RVUs is typically not appropriate, as often a 
change in physician time coincides with a change in the physician work 
intensity per minute. The commenters stated that CMS acknowledges that 
physician work intensity per minute is typically not linear and also 
that making reductions in RVUs in strict proportion to changes in time 
is inappropriate.
    Response: We do not agree with the commenters' characterization of 
our statements, and believe it misinterprets our view on this matter. 
We specifically stated in the CY 2017 proposed rule that we are not 
implying that the decrease in time as reflected in survey values must 
necessarily equate to a one-to-one or linear decrease in newly valued 
work RVUs, given that intensity for any given procedure may change over 
several years or within the intraservice period. Nevertheless, we 
believe that since the two components of work are time and intensity, 
that absent an obvious or explicitly stated rationale for why the 
relative intensity of a given procedure has specifically increased or 
that the reduction in time is disproportionally from less-intensive 
portions of the procedure, that significant decreases in time should 
generally be reflected in decreases to work RVUs.
    Comment: A few commenters, including the RUC, stated that they 
wanted to remind CMS of the Agency's and the RUC's longstanding 
position that treating all components of physician time as having 
identical intensity is incorrect, and inconsistently applying this 
treatment to only certain services under review creates inherent 
payment disparities in a payment system that is based on relative 
valuation. The commenters stated that when physician times are updated 
in the fee schedule, the ratio of intra-service time to total time, the 
number and level of bundled post-operative visits, the length of pre-
service, and the length of immediate post-service time may all 
potentially change for the same service. These changing components of 
physician time result in the physician work intensity per minute often 
changing when physician time also changes, and the commenters 
recommended that CMS always account for these nuanced variables. A few 
commenters also stated that the RUC recommendations now explicitly 
state when physician time has changed and address whether and to what 
magnitude these changes in time impact the work involved.
    Response: We appreciate the commenters' feedback. We understand 
that not all components of physician time have identical intensity and 
are mindful of this point when we are determining what the appropriate 
work RVU values should be. We also agree that the nuanced variables 
involved in the changing components of physician time must be accounted 
for, and it is our goal to do so when determining the appropriate 
valuation. We appreciate when the RUC recommendations provide as much 
detailed information regarding the recommended valuations as possible, 
including thorough discussions regarding physician time changes and how 
the RUC believes such changes should or should not impact the work 
involved, and we consider that information when conducting our review 
of each code.
    Comment: A few commenters stated that CMS places undue emphasis on 
time and not enough emphasis on intensity or whether a value is 
appropriately ranked in the Medicare fee schedule. The commenters 
stated that CMS ignores compelling evidence that work has changed if 
the time has not also changed, and that CMS uses codes as supporting 
references for new lower values that make no clinical sense. The 
commenters urged CMS to always consider all elements of relative work 
in every review, including time, relative intensity and relative work.
    Response: We disagree with commenters' statement that CMS ignores 
compelling evidence that work has changed if the time has not also 
changed. As previously stated, we are not making refinements solely in 
consideration of time, and if that were the case, changes in work RVU 
values that we adopted would consistently be comparable to the changes 
in the time that we adopted, and that is not the case. It is our 
practice to consider all elements of the relative work when we are 
reviewing and determining work RVU valuations. Additionally, our review 
of recommended work RVUs and time inputs generally includes review of 
various sources such as information provided by the RUC, other public 
commenters, medical literature, and comparative databases.
    Comment: A few commenters, including the RUC, stated that they do 
not agree with any suggested methodology to use a reverse building 
block methodology to systematically

[[Page 80276]]

reduce work RVUs for services. The commenters stated that any purely 
formulaic approach should never be used as the primary methodology to 
value services, and that it is highly inappropriate due to the fact 
that magnitude estimation was used to establish work RVUs for services.
    Response: We note that a formulaic approach is not being used as 
the primary methodology to value services. Instead, we use various 
methodologies to identify values to consider relative to other PFS 
services. We reiterate that we use the RUC-recommended values or the 
existing values as the base values. We then apply adjustments to the 
RUC-recommended values where, for example, the RUC's recommendations do 
not account for changes in time.
    Comment: Another commenter stated that the establishment of a time 
formula or use of reverse building block methodology as the primary 
method for valuation would completely disregard the possibility that 
physicians actually get better at what they do in favor of the 
erroneous conclusion that physicians only find new ways to cut corners. 
The commenter provided an example to demonstrate why time alone does 
not create value, and it is instead just one component of valuation. 
The commenter described an example of two watchmakers that make watches 
at different rates--one makes two watches per day, the other makes four 
watches per day. Each watch involves the same number of gears, 
sprockets, jewels, and escapements. One watchmaker is faster than the 
other: More focused, more experienced, more agile, and able to 
accomplish fastidious work more efficiently. At the end of one workday, 
the first watchmaker has two finished watches on the bench, while the 
other has four. The commenter questioned that if the watches are 
identical, why should the faster (better) watchmaker be paid half the 
price for each watch?
    Response: We understand some stakeholders' interest in the 
maintenance of work RVUs regardless of efficiencies gained. The work 
RVU is not a measure of our appreciation for the work ethic of the 
physician. Instead, the work RVU reflects the time and intensity of a 
particular service relative to others on the PFS. For this reason, we 
do not agree with the implication that we should ignore efficiencies in 
time, and instead believe that we are obligated to recognize when 
efficiencies change the relative resource costs involved in particular 
procedures. Of course, such efficiencies can occur as physicians become 
more proficient and can therefore complete a service or procedure in 
less time. We believe that time is a tangible resource, particularly 
the time of a physician or other practitioner paid on the PFS, and the 
statute specifically identifies it as such.
    Comment: A few commenters urged CMS to always enlist the assistance 
of medical officers familiar with procedures under review to examine 
CMS staff recommendations that reject the RUC recommendation. 
Similarly, a few commenters also urged CMS to work with the RUC to 
ensure that the robust discussions and key points that are discussed 
during RUC meetings are transferred to CMS in a way that is meaningful 
to staff to develop the proposed relative value recommendations.
    Response: We note that the values proposed by CMS are developed 
through consultation with, and input from CMS staff including medical 
officers, who often attend RUC meetings as observers, and therefore, 
have had the opportunity to listen to the discussions that take place 
and key points that are raised during the RUC meetings.
    Comment: One commenter stated that the recent rejections of RUC 
recommendations by CMS to instead reduce the work RVUs for almost every 
code, even if only by one or two percent, are illogical.
    Response: We do not agree with the suggestion that we reject the 
RUC-recommended values for most codes. Furthermore, given the numerical 
specificity of the RUC-recommended values and that so many PFS services 
reviewed under the misvalued code initiative are high-volume, we do not 
believe that relatively minor adjustments are unimportant or illogical 
because a minor adjustment to the work RVU of a high-volume code may 
have a significant dollar impact. However, we would be interested to 
know if stakeholders generally agree that the RUC-recommended values 
represent only rough estimates, and because of that belief, minor 
refinements would be considered illogical, as indicated by the 
commenter.
    Comment: A few commenters stated that they are concerned with the 
CMS trend to discredit intensity when assigning work RVUs to 
procedures. These commenters stated that intensity is a key factor when 
specialties are making work RVU recommendations and needs to remain an 
equal force along with time in the relative value system. One commenter 
stated that it is concerned that CMS is repeatedly ignoring intensity 
discussions and picking arbitrary crosswalks to justify lowering work 
RVU values. One commenter stated that by placing the same value on 
clearly different services that vary both in intensity and in types of 
patients treated, CMS ignores its statutory requirement to consider 
time and intensity in the valuation of services. One commenter stated 
that CMS does not mention how it considers, weights or measures 
intensity, and there is no validity to the assumption that reduced time 
equals less work. The commenter stated that it found no published 
evidence supporting this, and states that if the same amount of work is 
performed for a shorter period of time, it is logical that the 
intensity of work per unit of time increases. The commenter stated that 
CMS must be transparent and demonstrate why current intensity 
measurements are not appropriate, and if there is a more accurate way 
to measure intensity, this must be clearly elucidated with evidence for 
superiority of the alternative proposal.
    Response: We disagree that we discredit intensity when we establish 
work RVUs for procedures. We reiterate that we use RUC-recommended 
values or existing values, which we understand to incorporate an 
assessment of intensity, as the base values, and then subsequently 
apply adjustments as necessary. Additionally, as we have previously 
stated, we recognize that it would not be appropriate to develop work 
RVUs solely based on time given that intensity is also an element of 
work. Additionally, if we were to disregard intensity altogether, the 
work RVUs for all services would be developed solely based on time 
values, and that is absolutely not the case. We have previously stated 
that in cases where the RUC's recommendations do not account for 
changes in time, but do provide a persuasive explanation regarding why 
the time has drastically changed but the work RVU value has remained 
the same, our tendency has been to use those values as recommended. 
When the RUC's recommendations do not account for changes in time, and 
provide no explanation as to why this is appropriate, we have made 
changes to the RUC-recommended values to account for changes in time.
    We also disagree that we ignore the statutory requirement to 
consider time and intensity in the valuation of services. Based on the 
assessments of CMS medical officers and other reviewers, as well as 
upon consideration of the survey results, and the rationales in the 
recommendations, we make determinations about the overall work 
valuations. We acknowledge that the degree to which intensity varies 
among different procedures is a relatively subjective assessment, and 
we understand that sometimes stakeholders

[[Page 80277]]

may have a different perspective in cases where the intensities of 
procedures differ. We recognize that the IWPUT measure is a derived 
value with specific uses for quantifying intensity. However, the 
limited way in which that derived value is used under the RUC valuation 
process, we believe reflects a general consensus that there are not 
widely accepted metrics for intensity. As a part of recommendations for 
misvalued codes, we welcome any information from stakeholders for us to 
more objectively measure intensity.
    Comment: A few commenters stated that they are concerned with the 
current implied methodology that the 25th survey percentile is the 
ceiling for RUC recommendations, and stated that if codes are 
continually sent forth for re-survey and the 25th percentile is the 
ceiling, a built in reduction is applied to all surveyed codes just by 
the nature of surveying the codes, regardless of other factors.
    Response: We disagree with commenters' statement that the 25th 
survey percentile is the ceiling for RUC recommendations. We note that, 
as previously stated in the CY 2011 final rule with comment period (75 
FR 73328), we had concerns that surveys conducted on existing codes 
produced predictable results, and upon clinical review of a number of 
these situations, we were concerned over the validity of the survey 
results since the survey values often were very close to the current 
code values. Increasingly, the RUC is choosing to recommend the 25th 
percentile survey value, potentially responding to the same concern we 
have identified, rather than recommending the median survey value that 
had historically been the most commonly used. We reiterate that this 
does not designate the 25th percentile as the ceiling, rather suggests 
that in many instances the 25th percentile is the most appropriate 
since it is more frequently being identified through the RUC process as 
the recommended value.
    Comment: One commenter stated that the time data obtained through 
the RUC survey process based on subjective physician perceptions of 
time, may not be the most accurate data available on intraoperative 
time. The commenter stated that CMS should be open to reviewing 
additional sources of objective validated time data, and that such 
sources might include peer reviewed and published studies of 
comparative surgery times amongst different procedures in the same 
institution using standardized metrics. Another commenter stated that 
if CMS seeks specific information to substantiate time and intensity 
changes associated with services, they should specify these clearly so 
stakeholders can provide the necessary data detailing changes over 
time.
    Response: As previously discussed, our review of work RVUs and time 
inputs utilizes information from various resources. It generally 
includes, but is not limited to a review of information provided by the 
RUC, HCPAC, and other public commenters, medical literature, and 
comparative databases, as well as comparison with other codes with the 
PFS, consultation with other physicians and health care professionals 
within CMS and the federal government, as well as Medicare claims data. 
Additionally, we also assess the methodology and data used to develop 
the recommendations submitted to us by the RUC and other public 
commenters and the rationale for the recommendations. However, we 
continue to seek information regarding the best sources of objective, 
routinely-updated, auditable, and robust data regarding the resource 
costs of furnishing PFS services.
    We thank the commenters for their feedback. We did not receive any 
comments regarding specific potential alternatives to making the 
adjustments that would recognize overall estimates of work in the 
context of changes in the resource of time for particular services as 
requested. However, we appreciate the commenters' sharing their 
concerns and suggestions and will continue to consider them as we 
continue examining the valuation of services, and as we explore the 
best way to address these issues.
3. Requests for Refinement Panel
    Consistent with the policy finalized in the CY 2016 PFS final rule 
with comment period, we have retained the Refinement Panel process for 
use with codes with interim final values where additional input by the 
panel is likely to add value as a supplement to notice and comment 
rulemaking. Because there are no codes with interim final values in 
this final rule, the refinement panel is not necessary for CY 2017. We 
note that many commenters requested inclusion of codes with proposed 
values for a refinement panel. While these requests are not consistent 
with our established process, given the number of requests we received, 
we are addressing them here. Many commenters appear to believe that 
that the purpose of the refinement panel process was to serve as a kind 
of ``appeals'' or reconsideration process outside of notice and comment 
rulemaking and that we have effectively eliminated a useful appeals 
process. We understand that the refinement panel has been perceived as 
an appeals process by many stakeholders. However, as we have previously 
clarified, the purpose of the refinement panel process was to assist us 
in reviewing the public comments on CPT codes with interim final work 
RVUs and to consider more fully the interests of the specialty 
societies who provide input on RVU work time and intensity with the 
budgetary and redistributive effects that could occur if we accepted 
extensive increases in work RVUs across a broad range of services. From 
our perspective, the objective of the refinement panel has long been to 
provide a needed venue for stakeholders to present any new clinical 
information that was not available at the time of the RUC valuation for 
interim final values in order that we arrive at the most appropriate 
final valuation, especially since the initial values for such codes 
were generally established approximately 2 months prior to being used 
for Medicare payment. In recent years, we have continually observed 
that the material presented to the refinement panel largely raised and 
discussed issues and perspective already included as part of the RUC 
meetings and considered by us.
    We believe that our new process, in which we propose the vast 
majority of code values in the proposed rule for public comment on 
those proposed values prior to their taking effect, provides 
stakeholders and the public with several opportunities to present data 
or information that might affect code valuation. We believe that this 
is generally consistent with the purpose of the rulemaking process and 
reflects our efforts to increase transparency and accountability to the 
public. We also note that we continue to seek new information that is 
relevant to valuation of particular services, including those with 
values recently finalized, for use in future rulemaking. We believe 
that notice and comment rulemaking provides the most appropriate means 
for valuing services under the PFS. We note that in several instances 
in this final rule, thoughtful and informative comments have helped us 
to finalize values for CY 2017 that we believe are improved from those 
we had proposed. In many cases, these changes reflect the RUC-
recommended value. Therefore, we urge commenters to review this 
information and continue to consider how we might continue to improve 
the notice and comment rulemaking process rather than establish a 
process outside of notice and comment rulemaking.
    Table 27 contains a list of codes for which we proposed work RVUs; 
this includes all RUC recommendations received by February 10, 2016, 
and

[[Page 80278]]

codes for which we established interim final values in the CY 2016 PFS 
final rule with comment period. When the proposed work RVUs vary from 
those recommended by the RUC or for which we do not have RUC 
recommendations, we address those codes in the portions of this section 
that are dedicated to particular codes. The final work RVUs and work 
time and other payment information for all CY 2017 payable codes are 
available on the CMS Web site under downloads for the CY 2017 PFS final 
rule at http://www.cms.gov/physicianfeesched/downloads/.
4. Methodology for Proposing the Direct PE Inputs To Develop PE RVUs
a. Background
    On an annual basis, the RUC provides us with recommendations 
regarding PE inputs for new, revised, and potentially misvalued codes. 
We review the RUC-recommended direct PE inputs on a code by code basis. 
Like our review of recommended work RVUs, our review of recommended 
direct PE inputs generally includes, but is not limited to, a review of 
information provided by the RUC, HCPAC, and other public commenters, 
medical literature, and comparative databases, as well as a comparison 
with other codes within the PFS, consultation with physicians and 
health care professionals within CMS and the federal government, as 
well as Medicare claims data. We also assess the methodology and data 
used to develop the recommendations submitted to us by the RUC and 
other public commenters and the rationale for the recommendations. When 
we determine that the RUC's recommendations appropriately estimate the 
direct PE inputs (clinical labor, disposable supplies, and medical 
equipment) required for the typical service, are consistent with the 
principles of relativity, and reflect our payment policies, we use 
those direct PE inputs to value a service. If not, we refine the 
recommended PE inputs to better reflect our estimate of the PE 
resources required for the service. We also confirm whether CPT codes 
should have facility and/or nonfacility direct PE inputs and refine the 
inputs accordingly.
    Our review and refinement of RUC-recommended direct PE inputs 
includes many refinements that are common across codes, as well as 
refinements that are specific to particular services. Table 28 details 
our finalized refinements of the RUC's direct PE recommendations at the 
code-specific level. In this final rule, we address several refinements 
that are common across codes, and refinements to particular codes are 
addressed in the portions of this section that are dedicated to 
particular codes. We note that for each refinement, we indicate the 
proposed impact on direct costs for that service. We note that, on 
average, in any case where the impact on the direct cost for a 
particular refinement is $0.32 or less, the refinement has no impact on 
the proposed PE RVUs. This calculation considers both the impact on the 
direct portion of the PE RVU, as well as the impact on the indirect 
allocator for the average service. We also note that nearly half of the 
proposed refinements listed in Table 28 result in changes under the 
$0.32 threshold and are unlikely to result in a change to the proposed 
RVUs.
    We also note that the final direct PE inputs for CY 2017 are 
displayed in the CY 2017 direct PE input database, available on the CMS 
Web site under the downloads for the CY 2017 final rule at www.cms.gov/PhysicianFeeSched/. The inputs displayed there have also been used in 
developing the final CY 2017 PE RVUs as displayed in Addendum B.
b. Common Refinements
(1) Changes in Work Time
    Some direct PE inputs are directly affected by revisions in work 
time. Specifically, changes in the intraservice portions of the work 
time and changes in the number or level of postoperative visits 
associated with the global periods result in corresponding changes to 
direct PE inputs. The direct PE input recommendations generally 
correspond to the work time values associated with services. We believe 
that inadvertent discrepancies between work time values and direct PE 
inputs should be refined or adjusted in the establishment of proposed 
direct PE inputs to resolve the discrepancies.
(2) Equipment Time
    Prior to CY 2010, the RUC did not generally provide CMS with 
recommendations regarding equipment time inputs. In CY 2010, in the 
interest of ensuring the greatest possible degree of accuracy in 
allocating equipment minutes, we requested that the RUC provide 
equipment times along with the other direct PE recommendations, and we 
provided the RUC with general guidelines regarding appropriate 
equipment time inputs. We continue to appreciate the RUC's willingness 
to provide us with these additional inputs as part of its PE 
recommendations.
    In general, the equipment time inputs correspond to the service 
period portion of the clinical labor times. We have clarified this 
principle over several years of rulemaking, indicating that we consider 
equipment time as the time within the intraservice period when a 
clinician is using the piece of equipment plus any additional time that 
the piece of equipment is not available for use for another patient due 
to its use during the designated procedure. For those services for 
which we allocate cleaning time to portable equipment items, because 
the portable equipment does not need to be cleaned in the room where 
the service is furnished, we do not include that cleaning time for the 
remaining equipment items, as those items and the room are both 
available for use for other patients during that time. In addition, 
when a piece of equipment is typically used during follow-up post-
operative visits included in the global period for a service, the 
equipment time would also reflect that use.
    We believe that certain highly technical pieces of equipment and 
equipment rooms are less likely to be used during all of the preservice 
or postservice tasks performed by clinical labor staff on the day of 
the procedure (the clinical labor service period) and are typically 
available for other patients even when one member of the clinical staff 
may be occupied with a preservice or postservice task related to the 
procedure. We also note that we believe these same assumptions would 
apply to inexpensive equipment items that are used in conjunction with 
and located in a room with non-portable highly technical equipment 
items since any items in the room in question would be available if the 
room is not being occupied by a particular patient. For additional 
information, we refer readers to our discussion of these issues in the 
CY 2012 PFS final rule with comment period (76 FR 73182) and the CY 
2015 PFS final rule with comment period (79 FR 67639).
(3) Standard Tasks and Minutes for Clinical Labor Tasks
    In general, the preservice, intraservice, and postservice clinical 
labor minutes associated with clinical labor inputs in the direct PE 
input database reflect the sum of particular tasks described in the 
information that accompanies the RUC-recommended direct PE inputs, 
commonly called the ``PE worksheets.'' For most of these described 
tasks, there are a standardized number of minutes, depending on the 
type of procedure, its typical setting, its global period, and the 
other procedures with which it is typically reported. The RUC sometimes 
recommends a number of minutes either greater than or less

[[Page 80279]]

than the time typically allotted for certain tasks. In those cases, we 
review the deviations from the standards and any rationale provided for 
the deviations. When we do not accept the RUC-recommended exceptions, 
we refine the proposed direct PE inputs to conform to the standard 
times for those tasks. In addition, in cases when a service is 
typically billed with an E/M service, we remove the preservice clinical 
labor tasks to avoid duplicative inputs and to reflect the resource 
costs of furnishing the typical service.
    In general, clinical labor tasks fall into one of the categories on 
the PE worksheets. In cases where tasks cannot be attributed to an 
existing category, the tasks are labeled ``other clinical activity.'' 
We believe that continual addition of new and distinct clinical labor 
tasks each time a code is reviewed under the misvalued code initiative 
is likely to degrade relativity between newly reviewed services and 
those with already existing inputs. This is because codes more recently 
reviewed would be more likely to have a greater number of clinical 
labor tasks as a result of the general tendency to increase the number 
of clinical labor tasks. To mitigate the potential negative impact of 
these additions, we review these tasks to determine whether they are 
fully distinct from existing clinical labor tasks, typically included 
for other clinically similar services under the PFS, and thoroughly 
explained in the recommendation. For those tasks that do not meet these 
criteria, we do not accept these newly recommended clinical labor 
tasks.
(4) Recommended Items That Are Not Direct PE Inputs
    In some cases, the PE worksheets included with the RUC 
recommendations include items that are not clinical labor, disposable 
supplies, or medical equipment or that cannot be allocated to 
individual services or patients. We have addressed these kinds of 
recommendations in previous rulemaking (78 FR 74242), and we do not use 
items included in these recommendations as direct PE inputs in the 
calculation of PE RVUs.
(5) New Supply and Equipment Items
    The RUC generally recommends the use of supply and equipment items 
that already exist in the direct PE input database for new, revised, 
and potentially misvalued codes. Some recommendations, however, include 
supply or equipment items that are not currently in the direct PE input 
database. In these cases, the RUC has historically recommended that a 
new item be created and has facilitated our pricing of that item by 
working with the specialty societies to provide us copies of sales 
invoices. For CY 2017, we received invoices for several new supply and 
equipment items. Tables 30 and 31 detail the invoices received for new 
and existing items in the direct PE database. As discussed in section 
II.A. of this final rule, we encourage stakeholders to review the 
prices associated with these new and existing items to determine 
whether these prices appear to be accurate. Where prices appear 
inaccurate, we encourage stakeholders to provide invoices or other 
information to improve the accuracy of pricing for these items in the 
direct PE database during the 60-day public comment period for this 
final rule. We expect that invoices received outside of the public 
comment period would be submitted by February 10th of the following 
year for consideration in future rulemaking, similar to our new process 
for consideration of RUC recommendations.
    We remind stakeholders that due to the relativity inherent in the 
development of RVUs, reductions in existing prices for any items in the 
direct PE database increase the pool of direct PE RVUs available to all 
other PFS services. Tables 30 and 31 also include the number of 
invoices received, as well as the number of nonfacility allowed 
services for procedures that use these equipment items. We provide the 
nonfacility allowed services so that stakeholders will note the impact 
the particular price might have on PE relativity, as well as to 
identify items that are used frequently, since we believe that 
stakeholders are more likely to have better pricing information for 
items used more frequently. A single invoice may not be reflective of 
typical costs and we encourage stakeholders to provide additional 
invoices so that we might identify and use accurate prices in the 
development of PE RVUs.
    In some cases, we do not use the price listed on the invoice that 
accompanies the recommendation because we identify publicly available 
alternative prices or information that suggests a different price is 
more accurate. In these cases, we include this in the discussion of 
these codes. In other cases, we cannot adequately price a newly 
recommended item due to inadequate information. Sometimes, no 
supporting information regarding the price of the item has been 
included in the recommendation. In other cases, the supporting 
information does not demonstrate that the item has been purchased at 
the listed price (for example, vendor price quotes instead of paid 
invoices). In cases where the information provided on the item allows 
us to identify clinically appropriate proxy items, we might use 
existing items as proxies for the newly recommended items. In other 
cases, we have included the item in the direct PE input database 
without any associated price. Although including the item without an 
associated price means that the item does not contribute to the 
calculation of the proposed PE RVU for particular services, it 
facilitates our ability to incorporate a price once we obtain 
information and are able to do so.
(6) Service Period Clinical Labor Time in the Facility Setting
    Generally speaking, our proposed inputs did not include clinical 
labor minutes assigned to the service period because the cost of 
clinical labor during the service period for a procedure in the 
facility setting is not considered a resource cost to the practitioner 
since Medicare makes separate payment to the facility for these costs. 
We address proposed code-specific refinements to clinical labor in the 
individual code sections.
(7) Procedures Subject to the Multiple Procedure Payment Reduction 
(MPPR) and the OPPS Cap
    We note that the public use files for the PFS proposed and final 
rules for each year display both the services subject to the MPPR lists 
on diagnostic cardiovascular services, diagnostic imaging services, 
diagnostic ophthalmology services and therapy services and the list of 
procedures that meet the definition of imaging under section 
1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap 
for the upcoming calendar year. The public use files for CY 2017 are 
available on the CMS Web site under downloads for the CY 2017 PFS final 
rule at http://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html.
4. Specialty-Mix Assumptions for Proposed Malpractice RVUs
    The final CY 2017 malpractice crosswalk table is displayed in the 
public use files for the PFS final rule. The public use files for CY 
2017 are available on the CMS Web site under downloads for the CY 2017 
PFS final rule at http://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html. The table lists 
the CY 2017 HCPCS codes and their respective source codes used to set 
the final CY 2017 MP RVUs where the

[[Page 80280]]

source code for this calculation deviates from the source code for the 
utilization otherwise used for purposes of PFS ratesetting. The MP RVUs 
for all PFS services and the utilization crosswalk used to identify the 
source codes for all other codes are reflected in Addendum B on the CMS 
Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
5. Valuation of Specific Codes
(1) Anesthesia Services Furnished in Conjunction With Lower 
Gastrointestinal (GI) Procedures (CPT Codes 00740 and 00810)
    CPT codes 00740 and 00810 are used to report anesthesia furnished 
in conjunction with lower gastrointestinal (GI) procedures. In the CY 
2016 PFS proposed rule (80 FR 41686), we discussed that in reviewing 
Medicare claims data, a separate anesthesia service is typically 
reported more than 50 percent of the time that various colonoscopy 
procedures are reported. We discussed that given the significant change 
in the relative frequency with which anesthesia codes are reported with 
colonoscopy services, we believed the relative values of the anesthesia 
services should be reexamined. We proposed to identify CPT codes 00740 
and 00810 as potentially misvalued and sought public comment regarding 
valuation for these services.
    The RUC recommended maintaining the base unit value of 5 as an 
interim base value for both CPT code 00740 and 00810 on an interim 
basis, due to their concerns about the specialty societies' surveys. 
The RUC suggested that the typical patient vignettes used in the 
surveys for both CPT codes 00740 and 00810 were not representative of 
current typical practice and recommended that the codes be resurveyed 
with updated vignettes. We stated in the CY 2017 proposed rule that we 
believed it premature to propose any changes to the valuation of CPT 
codes 00740 and 00810, continued to believe that these services are 
potentially misvalued, and sought additional input from stakeholders 
for consideration during future rulemaking.
    Comment: Commenters were supportive of CMS' proposal to maintain 
the current values for CPT codes 00740 and 00810 for CY 2017. One 
commenter requested that CMS ensure that reimbursement for anesthesia 
services remains adequate to compensate providers for the cost of 
furnishing these services. Commenters also stated that due to greater 
complexity of furnishing anesthesia services compared to moderate 
sedation, payment for anesthesia services should not be lower than the 
values established for moderate sedation.
    One commenter stated that CMS' perception that these codes are 
misvalued is related to the distinction between screening, diagnostic, 
and therapeutic endoscopies. The commenter further stated that there 
are no differences in the clinical risk and anesthesia preparation 
regardless of the indication for these procedures and suggested that 
the current base unit value of 5 units for CPT codes 00740 and 00810 is 
appropriate and should be maintained. Another commenter stated that the 
frequency of use of separate anesthesia services concurrent with 
colonoscopy procedures is not due to any potential misvaluation, but 
rather due to changes in Medicare coverage and payment policies that 
encourage Medicare beneficiaries to undergo screening colonoscopies.
    Response: We appreciate the information provided by commenters. We 
continue to encourage feedback from interested parties and specialty 
societies, all of which we will take under consideration for future 
rulemaking.
(2) Soft Tissue Localization (CPT Codes 10035 and 10036)
    In the CY 2016 PFS final rule with comment period, we established 
the RUC-recommended work value as interim final for CPT codes 10035 and 
10036. We also made standard refinements to remove duplicative clinical 
labor and utilize standard equipment time formulas for the PACS 
workstation proxy (ED050).
    Comment on the CY 2016 PFS final rule with comment period: A 
commenter stated that the clinical labor task ``Review/read X-ray, lab, 
and pathology reports'' occurs during the preservice period, and it is 
a separate activity than ``Review examination with interpreting MD'', 
which occurs during the service period.
    Response in the CY 2017 PFS proposed rule: We continued to believe 
that the clinical labor was duplicative with the clinical labor for 
``Review examination with interpreting MD'' because we believed that 
the two descriptors detailed the same clinical labor activity taking 
place, rather than two separate and distinct tasks.
    In the CY 2017 proposed rule, we proposed to maintain our previous 
refinement to 0 minutes for this clinical labor task for CPT codes 
10035 and 10036. We also proposed to maintain the interim final work 
RVUs for CPT codes 10035 and 10036.
    We did not receive any comments in response to our proposed 
valuation on CPT codes 10035 and 10036 and we are finalizing the 
clinical labor task and work RVUs as proposed.
(3) Removal of Nail Plate (CPT Code 11730)
    We identified CPT code 11730 through a screen of high expenditures 
by specialty. The HCPAC recommended a work RVU of 1.10. We believed the 
recommendation for this service overestimates the work involved in 
performing this procedure, specifically given the decrease in physician 
intraservice and total time concurrently recommended by the HCPAC. We 
believed that a work RVU of 1.05, which corresponds to the 25th 
percentile of the survey results, more accurately represents the time 
and intensity of furnishing the service. To further support the 
validity of the use of the 25th percentile of the survey, we identified 
two crosswalk codes, CPT code 20606 (Arthrocentesis, aspiration and/or 
injection, intermediate joint or bursa), with a work RVU of 1.00, and 
CPT code 50389 (Removal of nephrostomy tube, requiring fluoroscopic 
guidance), with a work RVU of 1.10, both of which have identical 
intraservice times, similar total times and similar intensity. We noted 
that our proposed work RVU of 1.05 for CPT code 11730 falls halfway 
between the work RVUs for these two crosswalk codes. CPT code 11730 may 
be reported with add-on CPT code 11732 to report performance of the 
same procedure for each additional nail plate procedure.
    Since CPT code 11732 was not reviewed by the HCPAC for CY 2017, we 
proposed a new work value to maintain the consistency of this add-on 
code with the base code, CPT code 11730. We proposed to remove 2 
minutes from the physician intraservice time to maintain consistency 
with the HCPAC-recommended reduction of 2 minutes from the physician 
intraservice time period for the base code. We are using a crosswalk 
from the value for CPT code 77001 (Fluoroscopic guidance for central 
venous access device placement, replacement (catheter only or 
complete), or removal (includes fluoroscopic guidance for vascular 
access and catheter manipulation, any necessary contrast injections 
through access site or catheter with related venography radiologic 
supervision and interpretation, and radiographic documentation of final 
catheter position) (List separately in addition to code for primary 
procedure)), which has similar physician intraservice and total time 
values; therefore, we proposed a

[[Page 80281]]

work RVU of 0.38 for CPT code 11732. As further support for this 
proposal, we noted that this proposed RVU reduction is similar to the 
value obtained by subtracting the incremental difference in the current 
and recommended work RVUs for the base code from the current value of 
CPT code 11732.
    We proposed to use the HCPAC-recommended direct PE inputs for CPT 
code 11730. We proposed to apply some of the HCPAC-recommended 
refinements for CPT code 11730 to CPT code 11732, including the removal 
of the penrose drain (0.25 in x 4 in), lidocaine 1%-2% inj (Xylocaine), 
applicator (cotton-tipped, sterile) and silver sulfadiazene cream 
(Silvadene), as well as the reduction of the swab-pad, alcohol from 2 
to 1. In addition, we proposed not to include the recommended supply 
items ``needle, 30g, and syringe, 10-12ml'' since other similar items 
are present, and we believe inclusion of these additional supply items 
would be duplicative. For clinical labor, we proposed to assign 8 
minutes to ``Assist physician in performing procedure'' to maintain a 
reduction that is proportionate to that recommended for CPT code 11730. 
For the supply item ``ethyl chloride spray,'' we believed that the 
listed input price of $4.40 per ounce overestimates the cost of this 
supply item, and we solicited comment on the accuracy of this supply 
item price. Finally, we proposed to add two equipment items as was done 
in the base code, basic instrument pack and mayo stand, and proposed to 
adjust the times for all pieces of equipment to eight minutes to 
reflect the clinical service period time.
    Comment: A commenter states that the work for CPT code 11730 has 
not changed since the previous recommendation, thus maintenance of a 
work RVU of 1.10 is proper.
    Response: We continue to believe that the HCPAC-recommended 
reduction in intraservice and total time supports a reduction in our 
estimation of the physician work value of furnishing this service.
    Comment: The HCPAC stated that it did not support the proposed 
decrease in the work RVU for CPT code 11732.
    Response: We welcome any additional input as to the appropriate 
valuation of CPT code 11732. At this time, we continue to believe that 
a work RVU of 0.38 is appropriate, considering its relationship to CPT 
code 11730. We proposed values for CPT code 11732 based on its being an 
add-on code for CPT code 11730. We remind commenters and stakeholders 
that they may nominate this code family as potentially misvalued if 
they believe that both codes should be evaluated through the standard 
process, which would involve use of physician survey data and input 
from the HCPAC for both codes. We are finalizing work RVUs of 1.05 for 
CPT code 11730 and 0.38 for CPT code 11732, as well as the proposed PE 
refinements.
(4) Bone Biopsy Excisional (CPT Code 20245)
    In CY 2014, CPT code 20245 was identified by the RUC's 10-Day 
Global Post-Operative Visits Screen.
    For CY 2017, the RUC recommended a work RVU of 6.50 for CPT code 
20245, including a change in global period from 10 to 0 days. We 
disagreed with this value given the significant reductions in the 
intraservice time, total time, and the change in the office visits 
assuming the change in global period. The intraservice and total times 
were decreased by approximately 33 and 53 percent respectively; while 
the elimination of three post-operative visits (one CPT code 99214 and 
two CPT code 99213 visits) alone would reduce the overall work RVU by 
at least 38 percent under the reverse building block methodology. We 
also note that the RUC-recommended work RVU of 6.50 only represents a 
27 percent reduction relative to the previous work RVU of 8.95. To 
develop a work RVU for this service, we used a crosswalk from CPT code 
19298 (Placement of radiotherapy after loading brachytherapy catheters 
(multiple tube and button type) into the breast for interstitial 
radioelement application following (at the time of or subsequent to) 
partial mastectomy, includes imaging guidance), since we believe the 
codes share similar intensity and total time and the same intraservice 
time of 60 minutes. Therefore, for CY 2017, we proposed a work RVU of 
6.00 for CPT code 20245.
    Comments: Several commenters, including the RUC, stated their 
objection to the proposed crosswalk, indicating that it underestimated 
the total time by 10 minutes and the physician work involved in 
furnishing the service. Commenters recommended CMS accept the RUC-
recommended work RVU of 6.50.
    The RUC also noted the current time of CPT code 20245 was based on 
a survey of 35 individuals more than 15 years ago and due to the 
previous flawed survey, the resulting IWPUT was almost zero. Given 
these discrepancies, the surveyed time of 60 minutes better reflects an 
appropriate level of intensity and complexity (IWPUT= 0.071) for this 
service relative to other 0-day global procedures.
    Another commenter stated concern that the values proposed by CMS 
have been arrived at using methodologies that are not consistent with 
the RUC-recommended values, and therefore, are not appropriately 
relative to other similar services.
    Response: Thank you for your comments. We present the information 
in Table 16 to illustrate the differences between the CMS crosswalked 
code and the additional RUC comparator codes.

                                     Table 16--Crosswalk for CPT Code 20245
----------------------------------------------------------------------------------------------------------------
                                                                   Intra-service
            CPT code                        Descriptor                 time         Total time       Work RVU
----------------------------------------------------------------------------------------------------------------
20245...........................  Bone Biopsy Excisional........              60             160          * 6.50
19298...........................  Place Breast Rad Tube/Cath....              60             169            6.00
36247...........................  Ins Cath ABDL/-Ext Art 3RD....              60             131            6.29
43262...........................  Endocholangiopancreatograp....              60             138            6.60
----------------------------------------------------------------------------------------------------------------
* RUC recommended value.

    Although the total times for CPT codes 19298 and 20245 are not 
identical, we continue to believe it is a more accurate comparison than 
the additional codes submitted by the RUC, which have 22-29 minutes 
less total time.
    We note that according to the most recent survey, respondents 
lowered the work RVU of the 25th percentile, which we typically accept, 
from 6.06 RVUs to 4.94 RVUs when the code was revalued with a 0-day 
global period.
    For CY 2017, we are finalizing the work RVU of 6.00 for CPT code 
20245.

[[Page 80282]]

(5) Insertion of Spinal Stability Distractive Device (CPT Codes 22867, 
22868, 22869, and 22870)
    For CY 2016, the CPT Editorial Panel converted two Category III 
codes to Category I codes describing the insertion of an interlaminar/
interspinous process stability device (CPT codes 22867 and 22869) and 
developed two corresponding add-on codes (CPT codes 22868 and 22870). 
The RUC recommended a work RVU of 15.00 for CPT code 22867, 4.00 for 
CPT code 22868, 7.39 for CPT code 22869, and 2.34 for CPT code 22870.
    We believe that the RUC recommendations for CPT codes 22867 and 
22869 overestimate the work involved in furnishing these services. We 
believe that a crosswalk to CPT code 36832 (Revision, open, 
arteriovenous fistula; without thrombectomy, autogenous or 
nonautogenous dialysis graft (separate procedure)), which has a work 
RVU of 13.50 is a more accurate comparison. CPT code 36832 is similar 
in total time, work intensity, and number of visits to CPT code 22867. 
This crosswalk is supported by the ratio between total time and work in 
the key reference service, CPT code 63047 (Laminectomy, facetectomy and 
foraminotomy (unilateral or bilateral with decompression of spinal 
cord, cauda equina and/or nerve root[s], [eg, spinal or lateral recess 
stenosis]), single vertebral segment; lumbar). Therefore, we proposed a 
work RVU of 13.50 for CPT code 22867. For CPT code 22869, we believed 
that CPT code 29881 (Arthroscopy, knee, surgical; with meniscectomy 
(medial OR lateral, including any meniscal shaving) including 
debridement/shaving of articular cartilage (chondroplasty), same or 
separate compartment(s), when performed) is an appropriate crosswalk 
based on clinical similarity, as well as intensity and total time. CPT 
code 29881 has a work RVU of 7.03; therefore, we proposed a work RVU of 
7.03 for CPT code 22869. We proposed the RUC-recommended work RVU for 
CPT codes 22868 and 22870 without refinement.
    Comment: Several commenters disagreed with our proposed valuation 
of the work RVU for CPT codes 22867 and 22869. They stated that the RUC 
crosswalk for each of these codes, respectively, is either identical to 
or a better match than the proposed CMS crosswalk.
    Response: We recognize that the RUC crosswalk of CPT code 29915 for 
CPT code 22867 has a total time that is more similar to the new code 
than the crosswalk we proposed (CPT code 36832). We consider multiple 
factors when identifying appropriate crosswalk codes. We note that 
RUC's crosswalk, CPT code 29915, had very low service utilization, 355 
in 2015, and was last reviewed by CMS and the RUC in April 2010. CPT 
code 36832, in contrast, had service utilization of 21,529 in 2015, and 
was most recently reviewed in October 2013. We considered the 
combination of these factors in choosing a crosswalk and determining a 
proposed work RVU. Commenters did not present any additional clinical 
information or data about this code that would lead us to reconsider 
our proposed valuation; therefore, we are finalizing the work RVU of 
13.50 for CPT code 22867.
    With regard to CPT code 22869, we disagree that the RUC crosswalk 
to CPT code 29880 is a closer comparison than CPT code 29881. The 
intraservice time for the newly created CPT code 22869 (43 minutes) is 
between that of the RUC recommended crosswalk CPT code 29880 (45 
minutes) and the CMS crosswalk CPTcode 29881 (40 minutes). Total time 
for CPT code 29881, however, is identical to total time for CPT code 
22869 (194 minutes), whereas the RUC recommended crosswalk CPT code 
29880 has a higher total time (199 minutes). We continue to believe, 
therefore, that our crosswalk is appropriate and we are finalizing the 
proposed work RVU of 7.03 for CPT code 22869.
(6) Biomechanical Device Insertion (CPT Codes 22853, 22854, and 22859)
    For CY 2016, the CPT Editorial Panel established three new Category 
I add-on codes and deleted one code to provide a more detailed 
description of the placement and attachment of biomechanical spinal 
devices. For CPT code 22853, the RUC recommended a work RVU of 4.88. 
For CPT codes 22854 and 22859, the RUC-recommended work RVUs are 5.50 
and 6.00, respectively.
    In reviewing the code descriptors, descriptions of work and 
vignettes associated with CPT codes 22854 and 22859, we concluded that 
the two procedures, in addition to having identical work time, contain 
many clinical similarities and do not have quantifiable differences in 
overall intensity. Therefore, we proposed the RUC-recommended work RVU 
of 5.50 for both CPT code 22854 and CPT code 22859. We believe that the 
RUC-recommended work RVU of 4.88 for CPT code 22853 overestimates the 
work in the procedure relative to the other codes in the family. We 
proposed a work RVU of 4.25 for CPT code 22853 based a crosswalk from 
CPT code 37237 (Transcatheter placement of an intravascular stent(s) 
(except lower extremity artery(s) for occlusive disease, cervical 
carotid, extracranial vertebral or intrathoracic carotid, intracranial, 
or coronary), open or percutaneous, including radiological supervision 
and interpretation and including all angioplasty within the same 
vessel, when performed; each additional artery (List separately in 
addition to code for primary procedure)), which is similar in time and 
intensity to the work described by CPT code 22853.
    Comment: Several commenters disagreed with our proposed valuation 
of the work RVU of 4.25 for CPT code 22853 rather than the RUC-
recommended work RVU of 4.88. They requested clarification regarding 
our crosswalk for this new code to CPT code 37237 instead of the RUC-
recommended crosswalk of CPT code 57267.
    Response: We take many factors into consideration when valuing a 
work RVU for a new code. We note that CPT code 57267 and CPT code 37237 
have identical intraservice times and very similar total work times. We 
note that CPT code 37237 was most recently valued in April 2013, 
whereas the RUC crosswalk CPT code 57267 was last reviewed in 2004. We 
continue to believe that CPT code 37237 is an appropriate crosswalk for 
valuing the new CPT code 22859. Therefore, we are finalizing our 
proposed work RVU of 4.25 for CPT code 22853.
    Comment: We received several comments objecting to our proposed 
work RVU of 5.50 for CPT code 22859, which is identical to the work RVU 
proposed by the RUC and accepted by CMS for CPT code 22854. Commenters 
provided detailed descriptions of the two procedures in an effort to 
demonstrate the higher intensity required by CPT code 22859 compared 
with CPT code 22854, thereby justifying the RUC-recommended work RVU of 
6.00 for CPT code 22859. Several commenters expressed confusion about 
the descriptors for all three of the new CPT codes (CPT codes 22853, 
22854, and 22859), in general, and stated their concern that the code 
descriptors do not clearly differentiate the work involved in 
furnishing the services.
    Response: While we are somewhat persuaded by commenters' detailed 
descriptions of the two procedures and the higher intensity of work 
involved in furnishing CPT code 22859 compared with CPT code 22854, we 
are concerned about a substantive disagreement between the RUC and 
survey respondents about the intensities of work involved in furnishing 
the services described by these new codes. The RUC and the survey 
respondents valued the

[[Page 80283]]

relative intensities of the two codes in the reverse order. The survey 
results indicated a work RVU of 8.16 (with 25th percentile of 7.0) for 
CPT code 22854 and a work RVU of 8.0 (with 25th percentile of 6.0) for 
CPT code 22859. The RUC reviewed the survey results and agreed that 
respondents overvalued the work involved in performing CPT code 22854. 
The RUC-recommended work RVU for CPT code 22854, which we are accepting 
as recommended, was established through a crosswalk to CPT code 37234. 
We agree that this is an appropriate crosswalk and valuation of this 
service. For CPT code 22859, the RUC also believed that the survey 
recommended work RVU of 8.0 was overvalued. The RUC recommended the 
25th percentile of survey results, with a work RVU of 6.0. We find it 
difficult to reconcile the conflicting valuations by the survey and the 
RUC of the absolute and relative intensity of these new codes.
    In addition to the survey results and RUC recommendations, we 
reviewed the descriptors of these codes and agree with commenters who 
found them vague and unclear. We share the concern of stakeholders who 
indicated that the lack of differentiation in the codes may lead to 
inconsistent use and reporting.
    Given the disagreement between the RUC and survey respondents 
regarding the order and level of intensity of these services, along 
with confusion about the code descriptors, we find that valuing the 
services of 22854 and 22859 differently from each another is difficult 
to justify. Therefore, we are finalizing our proposed work RVU of 5.50 
for CPT code 22859.
(7) Repair Flexor Tendon (CPT Codes 26356, 26357, and 26358)
    In the CY 2016 PFS final rule with comment period, we established 
an interim final work RVU of 9.56 for CPT code 26356 after considering 
both its similarity in time to CPT code 25607 (Open treatment of distal 
radial extra-articular fracture) and the recommended reduction in time 
relative to the current times assumed for this procedure. We 
established an interim final work RVU of 10.53 for CPT code 26357 based 
on a direct crosswalk from CPT code 27654 (Repair, secondary, Achilles 
tendon, with or without graft), as we believed that this work RVU 
better reflected the changes in time for this procedure. For the last 
code in the family, we established an interim final work RVU of 12.13 
for CPT code 26358, based on the RUC-recommended increment of 1.60 work 
RVUs relative to CPT code 26357.
    Comment on the CY 2016 PFS final rule with comment period: We 
received several comments regarding the interim final work values for 
this family of codes. One commenter stated that it was inappropriate to 
use time ratios to evaluate CPT code 26356 as it was last valued in 
1995, noting that there was an anomalous relationship between the 
current work RVU and the imputed time components in the RUC database. 
This commenter also pointed out that when the previous time was 
developed, fabrication of a splint was considered to be part of the 
intraservice work, while in the current survey instrument, the 
fabrication of the splint is considered to be part of the postservice 
work since it is a dressing. This commenter urged CMS to adopt the RUC 
recommendations. A different commenter agreed that the CMS crosswalk to 
CPT code 25607 was an appropriate crosswalk for CPT code 26356 and 
supported the CMS work RVU of 9.56.
    Response in the CY 2017 PFS proposed rule: We appreciate the 
support from the commenter. We continue to believe that our crosswalk 
for this code is an appropriate choice, due to our estimate of overall 
work between CPT code 26356 and CPT code 25607. We appreciate the 
commenters' concerns regarding the time ratio methodologies and have 
responded to these concerns about our methodology in section II.L of 
this final rule. Although we note the commenter's statement about how 
the service period in which fabrication of a splint takes place may 
have evolved over time, we do not agree that this task would be 
responsible for a decrease in intraservice survey time, as the 
postservice survey time for CPT code 26356 remained unchanged at 30 
minutes. If the decrease in intraservice time had been due to the shift 
of splinting from the intraservice period to the postservice period, 
then we would have expected to see an increase in the postservice 
period minutes. However, they remained exactly the same in the 
physician survey for CPT 26356. As we wrote earlier in this section, we 
believe in the validity of using pre-existing time values as a point of 
comparison, and we believe that we should account for efficiencies in 
time when the recommended work RVU does not account for those 
efficiencies. After consideration of comments received, we proposed to 
maintain CPT code 26356 at its current work RVU of 9.56 for CY 2017.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters disagreed with the work RVU for CPT code 26357. One 
commenter stated that the CMS crosswalk to CPT code 27654 had less 
total time and resulted in an inappropriately lower derived intensity. 
This commenter urged CMS to adopt the RUC-recommended work value. 
Another commenter stated that a better crosswalk for CPT code 26357 
would be CPT code 25608 (Open treatment of distal radial intra-
articular fracture or epiphyseal separation), the next code in the same 
upper extremity family that CMS used for the initial crosswalk. This 
commenter stated that the CMS crosswalk for CPT code 26357 created a 
rank order anomaly in terms of intensity within this family, and that 
the commenter's suggested crosswalk would create two pairs of matched 
codes, survey CPT codes 26356/26357 with crosswalk CPT codes 25607/
25608.
    Response in the CY 2017 PFS proposed rule: We appreciate the 
suggested crosswalk from the commenters, and we agree that the choice 
of the initial CMS crosswalk creates a rank order anomaly within the 
family in terms of intensity. As a result, after consideration of 
comments received, we proposed to instead value CPT code 26357 at the 
25th percentile survey work RVU of 11.00 for CY 2017. This valuation 
corrects the anomalous intensity within the Repair Flexor Tendon family 
of codes, and preserves the RUC-recommended increment between CPT codes 
26356 and 26357.
    Comment on the CY 2016 PFS final rule with comment period: The 
commenters agreed that the RUC-recommended increment of 1.60 was 
appropriate for the work RVU of CPT code 26358 when added to the work 
RVU of CPT code 26357. However, commenters stated that this increment 
of 1.60 should be added to the RUC-recommended work value for CPT code 
26357, and not the CMS refined value from the CY 2016 PFS final rule 
with comment period.
    Response in the CY 2017 PFS proposed rule: We also continue to 
believe that the increment of 1.60 is appropriate for the work RVU of 
CPT code 26358. After consideration of comments received, we therefore 
proposed to set the work RVU for this code at 12.60 for CY 2017, based 
on the increment of 1.60 from CPT code 26357's proposed work RVU of 
11.00.
    In the CY 2017 proposed rule, we proposed to maintain the current 
direct PE inputs for all three codes.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Repair Flexor Tendon codes:

[[Page 80284]]

    Comment: One commenter expressed support for the proposed work RVU 
for the flexor tendon codes.
    Response: We appreciate the support from the commenters.
    After consideration of comments received, we are finalizing our 
proposed valuation of the Repair Flexor Tendon codes.
(8) Closed Treatment of Pelvic Ring Fracture (CPT Codes 27197 and 
27198)
    For CY 2017, the CPT Editorial Panel deleted CPT codes 27193 and 
27194 and replaced them with new CPT codes 27197 and 27198. The RUC 
recommended a work RVU of 5.50 for CPT code 27193, and a work RVU of 
9.00 for CPT code 27198. We proposed to change the global period for 
these services from 90 days to 0 days because these codes typically 
represent emergent procedures with which injuries beyond pelvic ring 
fractures are likely to occur; we believe it is typical that multiple 
practitioners would be involved in providing post-operative care and it 
is likely that a practitioner furnishing a different procedure is more 
likely to be providing the majority of post-operative care. If other 
practitioners are typically furnishing care in the post-surgery period, 
we believe that the six post-service visits included in CPT code 27197, 
and the seven post-service visits included in CPT code 27198, would 
likely not occur. This is similar to our CY 2016 review and valuation 
of CPT codes 21811 (Open treatment of rib fracture(s) with internal 
fixation, includes thoracoscopic visualization when performed, 
unilateral; 1-3 ribs), 21812 (Open treatment of rib fracture(s) with 
internal fixation, includes thoracoscopic visualization when performed, 
unilateral; 4-6 ribs), and 21813 (Open treatment of rib fracture(s) 
with internal fixation, includes thoracoscopic visualization when 
performed, unilateral; 7 or more ribs). In our valuation of those 
codes, we determined that a 0-day, rather than a 90-day global period 
was preferable, in part because those codes describe rib fractures that 
would typically occur along with other injuries, and the patient would 
likely already be receiving post-operative care because of the other 
injuries. We believe that the same rationale applies here. To establish 
a work RVU for CPT code 27197, we proposed crosswalking this code to 
CPT code 65800 (Paracentesis of anterior chamber of eye (separate 
procedure); with removal of aqueous), due to its identical intraservice 
time and similar total time, after removing the work associated with 
postoperative visits, and its similar level of intensity. Therefore, we 
proposed a work RVU of 1.53 for CPT code 27197. For CPT code 27198, we 
proposed crosswalking this code to CPT code 93452 (Left heart 
catheterization including intraprocedural injection(s) for left 
ventriculography, imaging supervision and interpretation, when 
performed) which has an identical intraservice time and similar total 
time, after removing the work associated with post-operative visits 
from CPT code 27198. We proposed a work RVU of 4.75 for CPT code 27198.
    Comment: Some commenters stated that the new coding for these 
services was designed, in part, to address the appropriateness of a 90-
day global period by differentiating between higher energy and lower 
energy fractures. According to these commenters, the CPT Editorial 
Panel redefined these codes as treating injuries from higher energy and 
more unstable posterior pelvic ring injuries, and added a parenthetical 
directing physicians to use E/M billing for closed treatment of 
isolated lower energy fractures. These commenters say that the new 
coding clarifies when to use E/M coding for these services and when to 
bill these two codes. They state that these codes should thus remain 
valued with 90-day global periods while less complicated fractures will 
be billed with E/M coding.
    Response: We took into consideration many factors when determining 
the appropriate global period of this service. While we understand that 
the new coding was partly designed to address the appropriateness of a 
90-day global period, we continue to believe that a 0-day, rather than 
a 90-day, global period is more appropriate for this code, since we 
believe that the patient would likely already be receiving post-
operative care because of other injuries. We also believe that the 
practitioner who performs the original procedure may not typically be 
performing the follow-up care, and shifting to a 0-day global period 
will allow the appropriate practitioner to report the follow up care, 
when appropriate.
    Comment: A commenter stated that assigning a 0-day global period to 
this code will cause these codes to be different from all other closed 
fracture codes, which the commenter believes will lead to confusion for 
physicians and rank order anomalies.
    Response: The commenter did not present sufficient information to 
explain why the variation in global periods for these kinds of services 
would uniquely cause rank order anomalies. We agree that it is 
preferable that codes for similar procedures have similar global 
periods; however, other factors specific to each code are taken into 
consideration when determining the appropriate global period. In the 
case of CPT codes 27197 and 27198, we continue to believe that the 
emergent nature inherent with the injuries considered typical would 
mean that other physicians would typically perform follow-up care. For 
detailed guidance on billing global surgical procedures, we direct 
readers to the Medicare Claims Processing Manual, Pub. 100-04; billing 
requirements and adjudication of claims requirements for global 
surgeries are under chapter 12, sections 40.2 and 40.4. We also note 
that if this procedure is billed concurrently with another procedure 
that is valued with a 10-day or 90-day global period, that the follow 
up visits associated with the latter procedure would occur as part of 
that package, while follow-up visits for these two codes would be 
reported using E/M coding.
    Comment: A commenter states that, for procedures valued as part of 
a 90-day global period, the physician who is performing the primary 
portion of the treatment is obligated to follow the patient throughout 
the entire global period and furnish follow-up care.
    Response: We understand the commenter's perspective that the 
treating physician is obligated to provide follow-up care within the 
global period; however, we do not believe that this necessitates the 
valuation of every surgical procedure with a 10-day or 90-day global 
period. While the treating physician would ideally provide follow-up 
care for these codes were they to be assigned 90-day global periods, we 
continue to believe that this would be an atypical situation for these 
types of treatments and for these types of injuries. We note that the 
assignment of a global period occurs in the process of evaluation of 
codes and we take into consideration factors specific to each 
procedure. There may be many instances when codes with similar 
procedures have different global periods. We are finalizing as proposed 
the work RVUs of 1.53 for CPT code 27197 and 4.75 for CPT code 27198, 
as well as an assignment of 0-day global periods.
(9) Bunionectomy (CPT Codes 28289, 28291, 28292, 28295, 28296, 28297, 
28298, and 28299)
    The RUC identified CPT code 28293 as a 90-day global service with 
more than 6 office visits and CPT codes 28290-28299 as part of the 
family of services. In October 2015, the CPT Editorial Panel created 
two new CPT codes (28291, 28295), deleted CPT codes 28290, 28293, and 
28294 and revised CPT codes 28289, 28292, 28296,

[[Page 80285]]

28297, 28298 and 28299 based on the rationale that more accurate 
descriptions of the services needed to be developed.
    For CPT codes 28289, 28292, 28296, 28297, 28298, and 28299, the RUC 
recommended and we proposed work RVUs of 6.90, 7.44, 8.25, 9.29, 7.75, 
and 9.29 respectively. For CPT code 28291, the RUC recommended a work 
RVU of 8.01 based on the 25th percentile of the survey. We believed the 
recommendation for this service overestimates the overall work involved 
in performing this procedure given the decrease in intraservice time, 
total time, and post-operative visits when compared to deleted 
predecessor CPT code 28293. Due to similarity in intraservice and total 
times, we believed a direct crosswalk of the work RVUs for CPT code 
65780 (Ocular surface reconstruction; amniotic membrane 
transplantation, multiple layers) to CPT code 28291 more accurately 
reflects the time and intensity of furnishing the service. Therefore, 
for CY 2017, we proposed a work RVU of 7.81 for CPT code 28291.
    For CPT code 28295, the RUC recommended a work RVU of 8.57 based on 
the 25th percentile of the survey. We believed the recommendation for 
this service overestimates the work involved in performing this 
procedure given the similarity in the intensity of the services and 
identical intraservice and total times as CPT code 28296. Therefore, we 
proposed a direct RVU crosswalk from CPT code 28296 to CPT code 28295. 
For CY 2017, we proposed a work RVU of 8.25 for CPT code 28295.
    Comments: A few commenters, including the RUC, objected to the 
proposed work RVUs for CPT codes 28291 and 28295. Commenters noted that 
deleted CPT code 28293 was marked by the RUC as ``not to use for 
validation of physician work''. The RUC noted the previous time was 
based on Harvard time and when reviewed in 1995, the RUC maintained the 
physician work and Harvard time because there was no compelling 
evidence to revise the value at that time.
    The RUC acknowledged that the deleted CPT code 28293 had 30 minutes 
more intra-service time and a higher work RVU of 11.48 compared to the 
recommended work RVU of 8.01 for CPT code 28291. However, the RUC 
stated the differences in the physician work, time, intensity and the 
actual new service as described in CPT code 28291 were appropriately 
accounted for in its recommendation.
    The RUC also stated disagreement with the proposed crosswalk of 
work RVUs from CPT code 28291 to CPT code 65780. The RUC stated it 
compared the family and relative ranking and believed CPT code 28291 
was more complex and intense than CPT code 28298. The relative 
difference in work and complexity was reviewed and correctly ranked by 
the survey respondents at the 25th percentile, which corresponds with 
the RUC-recommended value.
    One commenter stated that CPT code 28293 was deleted and a new CPT 
code was established because the two procedures were no longer 
synonymous. Also, the slight decrease in the intraoperative intensity 
with the new value is barely measurable, and therefore, the commenter 
does not agree with CMS that a work RVU of 7.81 is a more accurate 
valuation.
    One commenter stated that CPT code 28295 is more intense than CPT 
code 28296 because CPT code 28295 requires separate areas of 
dissection. With CPT code 28296, the osteotomy and soft tissue 
procedure are performed at the same anatomic location. The commenter 
stated this nuance in complexity is the rationale for separate codes 
and is similar to the rationale for separate cervical versus lumbar 
spine codes or artery versus vein codes for vascular work.
    Response: We appreciate additional information offered by the 
commenters. After consideration of comments received, we agreed with 
the additional information provided by commenters and are finalizing 
the RUC-recommend work RVUs of 6.90, 8.01, 7.44, 8.57, 8.25, 9.29, 7.75 
and 9.29 for CPT codes 28289, 28291, 28292, 28295, 28296, 28297, 28298 
and 28299; respectively.
(10) Endotracheal Intubation (CPT Code 31500)
    In the CY 2016 PFS final rule with comment period (80 FR 70914), we 
identified CPT code 31500 as potentially misvalued. The specialty 
societies surveyed this code, and after reviewing the survey responses 
(which included increases in time) the RUC recommended a work RVU of 
3.00 for CPT code 31500. After reviewing the RUC's recommendation, we 
proposed a work RVU of 2.66, based on a direct crosswalk to CPT code 
65855 (Trabeculoplasty by laser surgery), which has similar intensity 
and service times.
    Comment: Commenters requested that CMS finalize the RUC-recommended 
work RVU of 3.00 instead of CMS' proposed 2.66 work RVUs. The RUC 
stated that the surveyed median intraservice time is 10 minutes, 
representing a doubling of the current intraservice time of 5 minutes. 
Commenters also disagreed with CMS' proposed crosswalk from CPT code 
65855. The RUC stated that given the emergent nature of the services 
reported with CPT code 31500, there are few relevant physician work and 
time-based comparisons within the resource-based relative value scale 
(RBRVS).
    Response: We appreciate commenters' feedback on our proposal. As 
pointed out by the commenters, the survey data shows increased 
intraservice and total times for these services. We agree with 
commenters that due to the emergent nature of these services, there are 
few relevant physician work and time-based comparisons for this 
service. Therefore, due to the emergent nature of these services and 
service time increases, for CY 2017, we are finalizing a work RVU of 
3.00 for CPT code 31500.
(11) Flexible Laryngoscopy (CPT Codes 31572, 31573, 31574, 31575, 
31576, 31577, 31578, and 31579)
    After we identified CPT codes 31575 and 31579 as potentially 
misvalued (80 FR 70912-70914), the RUC referred the entire flexible 
laryngoscopy family of codes back to the CPT Editorial Panel for 
revision and the addition of several codes representing new technology 
within this family of services. At the May 2015 CPT meeting, the CPT 
Editorial Panel added three new codes to describe laryngoscopy with 
ablation or destruction of lesion and therapeutic injection. Based on 
the survey results, the time resources involved in furnishing the 
procedures described by this code family experienced a significant 
reduction in the intraservice period, yet the recommended work RVUs 
were not similarly reduced. Therefore, in reviewing the recommended 
values for this family of codes we looked for a rationale for increased 
intensity and absent such rationale, proposed to adjust the recommend 
work RVUs to account for significant changes in time.
    For CPT code 31575, we disagreed with the RUC-recommended work RVU 
of 1.00, and we instead proposed a work RVU of 0.94. We looked at the 
total time ratio for CPT code 31575, which is decreasing from 28 
minutes to 24 minutes, and applied this ratio of 0.86 times the current 
work RVU of 1.10 to derive our proposed work RVU of 0.94. We supported 
this value for CPT code 31575 through a crosswalk to CPT code 64405 
(Injection, anesthetic agent; greater occipital nerve), which shares 5 
minutes of intraservice time and also has a work RVU of 0.94.
    We agreed with the RUC that CPT code 31575 serves as the base code 
for the rest of the Flexible Laryngoscopy family. As a result, we 
proposed to

[[Page 80286]]

maintain the same RUC-recommended increments for the rest of the codes 
in this family, measuring the increments from CPT code 31575's refined 
work RVU of 0.94 instead of the RUC-recommended work RVU of 1.00. This 
meant that each of the work RVUs for the codes in the rest of the 
family decreased by 0.06 when compared to the RUC-recommended value. We 
therefore proposed a work RVU of 1.89 for CPT code 31576, a work RVU of 
2.19 for CPT code 31577, a work RVU of 2.43 for CPT code 31578, a work 
RVU of 3.01 for CPT code 31572, a work RVU of 2.43 for CPT code 31573, 
a work RVU of 2.43 for CPT code 31574, and a work RVU of 1.88 for CPT 
code 31579.
    Regarding the direct PE inputs, we proposed to use refined clinical 
labor time for ``Obtain vital signs'' for CPT codes 31577 and 31579 
from 3 minutes to 2 minutes. We believe that this extra clinical labor 
time is duplicative, as these codes are typically performed with a same 
day E/M service. Each procedure is only allotted a maximum of 5 minutes 
for obtaining vital signs, and since 3 minutes are already included in 
the E/M code, we proposed to reduce the time to 2 minutes for these 
services. Similarly, we proposed to remove the 3 minutes of clinical 
labor time for ``Clean room/equipment by physician staff'' from CPT 
codes 31575, 31577, and 31579. These procedures are typically reported 
with a same day E/M service, making the clinical labor minutes for 
cleaning the room in these procedure codes duplicative of the time 
already included in the E/M codes.
    For CPT code 31572, we proposed to remove the ``laser tip, diffuser 
fiber'' supply (SF030) and replace it with the ``laser tip, bare 
(single use)'' supply (SF029) already present in our direct PE 
database. We believe that the invoice for SF030 submitted with the RUC 
recommendation is not current enough to establish a new price for this 
supply; as a result, we substituted the SF029 supply for this input. We 
welcomed the submission of new invoices to accurately price the 
diffuser fiber with laser tip.
    We also proposed to make significant changes to the prices of 
several of the supplies and equipment related to Flexible Laryngoscopy, 
as well as to the prices of scopes more broadly. We proposed to set the 
price of the disposable biopsy forceps supply (SD318) at $26.84, based 
on the submission of an invoice with a price of $536.81 for a unit size 
of 20. In our search for additional information regarding scope inputs, 
we obtained a quote from a vendor listing the current price for several 
equipment items related to the use of scopes. Since we believe that the 
prices in vendor quotes would typically be equal to or higher than 
prices actually paid by practitioners, we are updating the prices in 
our direct PE database to reflect this new information. As part of this 
process, we proposed to increase the price of the ``light source, 
xenon'' (EQ167) from $6,723.33 to $7,000 to reflect current pricing 
information. We also proposed to adjust the price of the ``fiberscope, 
flexible, rhinolaryngoscopy'' (ES020) from $6,301.93 to $4,250.00.
    In accordance with the wider proposal that we made involving the 
use of scope equipment, we proposed to separate the scopes used in 
these procedures from the scope video systems. In the course of 
researching different kinds of scopes, we obtained vendor pricing for 
two different types of scopes used in these procedures. We proposed to 
price the ``rhinolaryngoscope, flexible, video, non-channeled'' (ES063) 
at $8,000 and the ``rhinolaryngoscope, flexible, video, channeled'' 
(ES064) at $9,000 in accordance with our vendor quotes. We proposed to 
use the non-channeled scope for CPT codes 31575, 31579, and 31574 and 
the channeled scope for CPT codes 31576, 31577, 31578, 31572, and 31573 
in accordance with the RUC-recommended video systems that stipulated 
channeled versus non-channeled scope procedures.
    We believe that the ``Video-flexible laryngoscope system'' listed 
in the recommendations is not a new form of equipment, but rather 
constitutes a version of the existing ``video system, endoscopy'' 
equipment (ES031). We did not add a new equipment item to our direct PE 
database; instead, we proposed to use the submitted invoices to update 
the price of the ES031 endoscopy video system. As the equipment code 
for ES031 indicates, we proposed to define the endoscopy video system 
as containing a processor, digital capture, monitor, printer, and cart. 
We proposed to price ES031 at $15,045.00; this reflected a price of 
$2,000.00 for the monitor, $9,000.00 for the processor, $1,750.00 for 
the cart, and $2,295.00 for the printer. These prices were obtained 
from our vendor invoice, with the exception of the printer, which is a 
crosswalk to the ``video printer, color (Sony medical grade)'' 
equipment (ED036).
    We did not agree that there is a need for multiple different video 
systems for this collection of Flexible Laryngoscopy codes based on our 
understanding of the clinical differences among the codes. In keeping 
with this understanding, we proposed to use the same existing ``video 
system, endoscopy'' equipment (ES031) for the remaining codes in the 
family that included RUC recommendations for new equipment items named 
``Video-flexible channeled laryngoscope system'' and ``Video-flexible 
laryngoscope stroboscopy system.'' For CPT codes 31576, 31577, 31578, 
31572, and 31573, we proposed to replace the Video-flexible channeled 
laryngoscope system with the existing endoscopy video system (ES031) 
along with a channeled flexible video rhinolaryngoscope (ES064). For 
CPT code 31579, we proposed to rename the RUC-recommended ``Video-
flexible laryngoscope stroboscopy system'' to the shortened 
``stroboscopy system'' (ES065) and assign it a price of $19,100.00. 
This reflected the price of the StrobeLED Stroboscopy system included 
on the submitted invoice. We proposed to treat the stroboscopy system 
as a scope accessory, which was included along with the ``video system, 
endoscopy'' equipment (ES031) and the ``rhinolaryngoscope, flexible, 
video, non-channeled'' (ES063) for CPT code 31579. When the price of 
the scope, the scope video system, and the stroboscopy system were 
summed together, the total proposed equipment price was $42,145.00.
    We proposed to refine the recommended equipment times for several 
equipment items to conform to changes in clinical labor time. These 
are: The fiberoptic headlight (EQ170), the suction and pressure cabinet 
(EQ234), the reclining exam chair with headrest (EF008), and the basic 
instrument pack (EQ137). We proposed to use the standard equipment time 
formula for scope accessories for the endoscopy video system (ES031) 
and the stroboscopy scope accessory system (ES065). We also proposed to 
refine the equipment time for the channeled and non-channeled flexible 
video rhinolaryngoscopes to use the standard equipment time formula for 
scopes. For this latter pair of two new equipment items, this proposal 
resulted in small increases to their respective equipment times.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Flexible Laryngoscopy codes:
    Comment: Several commenters disagreed with the proposed work RVU 
for CPT code 31575. Commenters stated that the use of a work/time ratio 
was inconsistent with the methodology of magnitude estimation, and that 
reducing work RVUs by mathematical formula can arbitrarily manipulate 
intensities without allowing input from survey

[[Page 80287]]

recommendations provided by experts who perform the service. Commenters 
indicated their disapproval for a reverse building block methodology 
that assumes that if times for individual services change, work values 
must also change.
    Response: We continue to believe that the use of these 
methodologies, including the use of time ratios, is an appropriate 
process for code valuation when recommended work RVUs do not appear to 
account for significant changes in time. As we stated earlier in our 
discussion on this topic in this final rule, we use time ratios to 
identify potential work RVUs and consider these work RVUs as potential 
options relative to the values developed through other methodologies 
for code valuation. We continue to believe that the decrease in total 
time for CPT code 31575 from 28 minutes to 24 minutes was not accounted 
for in the recommended work RVU, and as a result we proposed a work RVU 
of 0.94, supported by a crosswalk to CPT code 64405. We continue to 
believe that this valuation for CPT code 31575 more accurately captures 
the reduction in physician work caused by the decrease in the time 
required to perform the procedure, noting again that the statute 
specifically defines the work component as the resources in time and 
intensity required in furnishing the service. We believe that our 
crosswalk to CPT code 64405, which has very similar time and intensity 
values to CPT code 31575 at the same work RVU of 0.94, supports our 
valuation for this service.
    Comment: Several commenters objected to the application of the work 
RVU increment to the rest of the codes in this family, measuring the 
increments from CPT code 31575's refined work RVU of 0.94 instead of 
the RUC-recommended work RVU of 1.00. Commenters stated that these 
codes were reviewed individually, not incrementally, and the use of an 
increment to reduce the work RVU of each code in the family by 0.06 was 
inappropriate. Commenters disagreed with the notion that when a base 
code's value is modified or reduced all other codes in the family 
should be reduced accordingly.
    Response: We review codes individually for valuation. When we apply 
an increment from a base code to the rest of a code family, we do so 
only after reviewing each code individually and determining that the 
RUC-recommended relativity between the codes in the family is correct. 
For this particular family of codes, we stated our belief that the 
relativity between the codes in the family was accurate, and that the 
increment between the codes should be maintained after adjusting the 
work RVU for the base code (CPT code 31575) to account for its 
significant decrease in time. As we detailed in our discussion of code 
valuation methodologies earlier in this final rule, we use a variety of 
different methods, such as survey data, building blocks, crosswalks to 
key reference or similar codes, time ratios, and increments between 
codes within the same family. In our review of RUC-recommended values, 
we have observed that the RUC also uses a variety of methodologies to 
develop work RVUs for individual codes, and subsequently validates the 
results of these approaches through magnitude estimation or crosswalk 
to established values for other codes. We continue to believe that the 
use of an incremental methodology is the most accurate way to value 
this particular code family because it maintains the appropriate 
relativity among the Flexible Laryngoscopy codes.
    Comment: One commenter disagreed with our refinement to remove the 
clinical labor time for ``Clean room/equipment by physician staff'' 
from the three codes in this family performed with a same day E/M 
service. The commenter stated that the clinical staff have to clean the 
equipment for procedure not used during the E/M service. According to 
the commenter, they clean that equipment separately and are assisting 
the physician during the entire procedure.
    Response: In response to the commenter, we investigated this issue 
and determined that in the past we have sometimes provided 1 minute of 
clinical labor time for cleaning additional equipment beyond what would 
be cleaned during the E/M visit. As a result, we are restoring 1 minute 
of clinical labor time for ``Clean room/equipment by physician staff'' 
for CPT codes 31575, 31577, and 31579.
    Comment: One commenter stated that there was a lack of clarity 
regarding the removal of the laser tip, diffuser fiber supply (SF030) 
from CPT code 31572. The commenter stated that the commenter supplied 
an invoice for the fibers, believed the invoice price was accurate, and 
believed the invoice should be utilized to set the price for this item.
    Response: We continue to believe that the invoice for SF030 
submitted with the RUC recommendation, which dates from 2009, is not 
current enough to establish a new price for this supply. We are 
continuing to maintain the laser tip, bare (single use) supply (SF029) 
in its place for CPT code 31572. As we discuss in the PE section of 
this final rule (II.A), we have concerns that the pricing for the laser 
tip, diffuser fiber supply has become outdated, and we are requesting 
the submission of additional current pricing information. We are 
maintaining the current pricing for this supply at $850 pending the 
submission of additional data.
    We note as well that there were many comments addressing our 
proposal to reclassify scope equipment, as well as the proper pricing 
of the scope equipment utilized in this family of codes. These comments 
are summarized with responses in the PE section of this final rule 
(II.A).
    After consideration of comments received, we are finalizing the 
work RVUs of the codes in the Flexible Laryngoscopy family at the 
proposed values. We are also finalizing the proposed direct PE inputs, 
with the exception of the refinement to the ``Clean room/equipment by 
physician staff'' clinical labor detailed above.
(12) Laryngoplasty (CPT Codes 31580, 31584, 31587, 31551-31554, 31591, 
and 31592)
    CPT code 31588 (Laryngoplasty, not otherwise specified (e.g., for 
burns, reconstruction after partial laryngectomy)) was identified as 
potentially misvalued based on the RUC's 90-Day Global Post-Operative 
Visits screen. When this code family was reviewed by the RUC, it was 
determined that some codes in the family required revision to reflect 
the typical patient before a survey could be conducted and the code 
family was referred to the CPT Editorial Panel for revision. At its 
October 2015 meeting, the CPT Editorial Panel approved the creation of 
six new codes, revision of three codes, and deletion of three codes. 
For CPT codes 31580, 31587, 31551, 31552, 31553, 31554, and 31592, CMS 
proposed the RUC-recommended work RVUs.
    For CPT code 31584, the RUC recommended a work RVU of 20.00. We 
believed that the 25th percentile of the survey, which is a work RVU of 
17.58, better represents the time and intensity involved with 
furnishing this service based on a comparison with and assessment of 
the overall intensity of other codes with similar instraservice and 
total time. This value is also supported by a crosswalk code of CPT 
code 42844 (Radical resection of tonsil, tonsillar pillars, and/or 
retromolar trigone; closure with local flap (e.g., tongue, buccal)), 
which has identical intraservice time and identical total time. 
Therefore, we proposed a work RVU of 17.58 for CPT code 31584.

[[Page 80288]]

    Comment: Several commenters requested that we provide an 
explanation for our proposed work RVU of 17.58 for the revised CPT code 
31584 instead of the RUC-recommended work RVU of 20.00. They stated 
that the modified code now represents the combination of two previously 
separate CPT codes (the existing CPT code 31584 combined with CPT code 
31600) and that the work RVU should better reflect the sum of the total 
time for these combined procedures. Commenters further noted that the 
proposed work RVU of 17.58 is lower, even, than the existing work RVU 
for CPT code 31584. A commenter requested that CMS consider two 
additional codes for comparison: CPT code 37660 and CPT code 43280.
    Response: We take multiple factors into account when valuing a 
service that replaces two previously separate codes. We consider the 
efficiencies of combining two services, as reflected in the adjustment 
upwards of the intra-service and total time for this code. We also 
review the code description and identify a value that is consistent 
with other, similar, 90-day global codes. Our valuation is above the 
median work RVU for a group of 28 codes with similar intraservice and 
total time. Commenters have not provided any additional information 
that would suggest this code should be valued differently from other 
90-day global codes with similar time and intensity.
    We reviewed the two additional codes that commenters recommended as 
comparisons. We note that CPT code 43280 (work RVU of 18.1) was most 
recently valued in 1997 and that for low-volume code CPT code 37660, 
physician intensity is considerably higher than that for CPT code 
31584, suggesting a poor reference for comparing the work involved in 
furnishing the service. For these reasons, we do not believe this code 
is an appropriate comparison for CPT code 31584 and we are finalizing 
our work RVU of 17.58 for CPT code 31584.
    For CPT code 31591, the RUC recommended a work RVU of 15.60. We 
believed that the 25th percentile of the survey, which is a work RVU of 
13.56, better represents the time and intensity involved with 
furnishing this service based on a comparison of the overall intensity 
of other codes with similar instraservice and total time. The 25th 
percentile of the survey is additionally bracketed by two crosswalk 
codes that we estimate have slightly lower and slighter higher overall 
intensities, CPT code 36819 (Arteriovenous anastomosis, open; by upper 
arm basilic vein transposition), which has a work RVU of 13.29, and CPT 
code 49654 (Laparoscopy, surgical, repair, incisional hernia (includes 
mesh insertion, when performed); reducible), which has a work RVU of 
13.76; both of these codes have identical intraservice time and similar 
total time. Therefore, we proposed a work RVU of 13.56 for CPT code 
31591.
    Comment: Several commenters disagreed with our proposed work RVU of 
13.56 for CPT code 31591, stating that the RUC-recommended work RVU of 
15.60 better reflects the work required to perform the procedure.
    Response: In developing our proposed valuation, we looked at other 
90-day global codes with identical intraservice time and similar total 
time (between 275 and 335), and we note that the median work RVU of the 
resulting values (reflecting 33 codes) is 13.76. We chose the 25th 
percentile of the survey because of its closeness to the median work 
RVU of comparable services. We recognize that the RUC's crosswalk to 
CPT code 58544, with a work RVU of 15.60, has a lower total time than 
the codes we used as comparisons, but we note that this code has very 
low utilization, with 103 procedures billed in 2015. We continue to 
believe that two codes bracketing the 25th percentile of the work RVU 
for CPT code 31591 (CPT codes 36819 and 49654), as noted in the CY2017 
PFS proposed rule, provide a better reference for valuing the new code, 
and that a work RVU of 13.56 adequately represents the time and 
intensity involved with furnishing the service. Therefore, we are 
finalizing our proposed work RVU of 13.56 for CPT code 31591.
    Additionally, the RUC forwarded invoices provided by a medical 
specialty society for the video-flexible laryngoscope system used in 
these services. We discussed our proposed changes to the items included 
in equipment item ES031 (video system, endoscopy) in the CY 2017 
proposed rule (81 FR 46247). Consistent with those proposed changes, we 
proposed to add a Nasolaryngoscope, non-channeled, to the list of 
equipment items used for CPT codes 31580, 31584, 31587, 31551-31554, 
31591, and 31592, along with the modified equipment item ES031.
    Comment: We received several comments, including from the RUC, 
about our proposal to implement a separate pricing approach for 
equipment inputs for this family of codes. Commenters requested a delay 
in implementing our approach until the RUC convened a PE subcommittee 
and provided CMS with specific recommendations for these codes.
    Response: We appreciate the commenters' interests in making certain 
that there is appropriate opportunity for stakeholders to provide 
feedback and recommendations on the reclassification and pricing of 
scopes. Because these codes are currently under review, however, we 
believe that they should be valued according to a scheme that 
accurately describes the scope equipment typically used in the 
services. We continue to believe that our proposed classification 
system for scopes is the more proper methodology to use for valuation 
of these codes for the CY 2017. Please refer to II.A of the final rule 
for additional discussion on the new pricing process.
(13) Closure of Left Atrial Appendage With Endocardial Implant (CPT 
Code 33340)
    The CPT Editorial Panel deleted category III CPT code 0281T 
(Percutaneous transcatheter closure of the left atrial appendage with 
implant, including fluoroscopy, transseptal puncture, catheter 
placement(s), left atrial angiography, left atrial appendage 
angiography, radiological supervision and interpretation) and created 
new CPT code 33340 to describe percutaneous transcatheter closure of 
the left atrial appendage with implant. The RUC recommended a work RVU 
of 14.00. We proposed a work RVU of 13.00 for CPT code 33340, which is 
the minimum survey result. Based on our clinical judgment and that the 
key reference codes discussed in the RUC recommendations have higher 
intraservice and total service times than the median survey results for 
CPT code 33340, we stated in the CY 2017 proposed rule that we believe 
a work RVU of 13.00 would more accurately represent the work value for 
this service.
    Comment: We received several comments, including from the RUC. 
Commenters noted inaccuracies in CMS' description of the RUC 
recommendations including descriptions of the relationship between the 
RUC-recommended work RVU, survey results, and service times for the two 
key reference codes. Commenters requested that CMS finalize the RUC-
recommended work RVU of 14.00.
    Response: We appreciate the commenters' feedback and acknowledge 
that we inadvertently mischaracterized the RUC's recommendations 
related to this service. We agree that the survey results showed a 25th 
percentile survey result of 19.88 and that during the RUC meeting, this 
code was referred to the facilitation committee whereby the RUC 
identified two comparable codes with

[[Page 80289]]

14.00 work RVUs, which the RUC factored into its analysis and 
recommended valuation for this service. After consideration of the 
comments, we are finalizing the RUC-recommended work RVU of 14.00 for 
CPT code 33340.
(14) Valvuloplasty (CPT Codes 33390 and 33391)
    The CPT Editorial Panel created new codes to describe valvuloplasty 
procedures and deleted existing CPT code 33400 (Valvuloplasty, aortic 
valve; open, with cardiopulmonary bypass). New CPT code 33390 
represents a simple valvuloplasty procedure and new CPT code 33391 
describes a more complex valvuloplasty procedure. We proposed to use 
the RUC-recommended values for CPT code 33390. For CPT code 33391, the 
RUC recommended a work RVU of 44.00, the 25th percentile survey result. 
The RUC estimated that approximately 70 percent of the services 
previously reported using CPT code 33400 would be reported using CPT 
code 33391, with 30 percent reported using new CPT code 33390. 
Therefore, the typical service previously reported with CPT code 33400 
ought to now be reported with CPT code 33391. Compared to deleted CPT 
code 33400, the survey results for CPT code 33391 showed similar median 
intraservice times and decreased total times. Therefore, we proposed a 
work RVU of 41.50 for CPT code 33391, which is the current value of CPT 
code 33400. Given that the typical service should remain consistent 
between the two codes, we stated that we believe the work RVUs should 
remain consistent as well.
    Comment: Commenters disagreed with CMS' proposed valuation of CPT 
code 33391, citing increased intensity and complexity of the 
procedures. Commenters noted that more complex patients are undergoing 
valvuloplasty (for instance, adult cardiac patients) when historically 
these patients would have received aortic valve replacements.
    Response: As discussed in the CY 2017 proposed rule, the deleted 
CPT code 33400 is being replaced with two CPT codes that identify 
simple and complex procedures. The RUC's utilization crosswalk suggests 
that approximately 70 percent of the services that would previously 
have been reported using the combined code (CPT code 33400) would now 
be reported with CPT code 33391, the complex procedure. Based on the 
RUC's utilization crosswalk, the complex procedure would be the typical 
procedure reported under the combined code (CPT code 33400). The survey 
data for the complex procedure (CPT code 33391) showed similar median 
intraservice times and decreased total times compared to CPT code 
33400. Therefore, for CY 2017, we are finalizing a work RVU of 35.00 
for CPT code 33390 and a work RVU of 41.50 for CPT code 33391.
(15) Mechanochemical Vein Ablation (MOCA) (CPT Codes 36473 and 36474)
    At the October 2015 CPT meeting, the CPT Editorial Panel 
established two Category I codes for reporting venous mechanochemical 
ablation, CPT codes 36473 and 36474. We proposed the RUC-recommended 
work RVU of 3.50 for CPT code 36473. For CPT code 36474, we proposed a 
work RVU of 1.75 and stated that we believed the RUC-recommended work 
RVU of 2.25 does not accurately reflect the typical work involved in 
furnishing this procedure. The specialty society survey showed that 
this add-on code has half the work of the base code (CPT code 36473). 
This value is supported by the ratio between work and time in the key 
reference service (CPT code 36476: Endovenous ablation therapy of 
incompetent vein, extremity, inclusive of all imaging guidance and 
monitoring, percutaneous, radiofrequency; second and subsequent veins 
treated in a single extremity, each through separate access sites (List 
separately in addition to code for primary procedure)).
    The RUC-recommended direct PE inputs for CPT codes 36473 and 36474 
included inputs for an ultrasound room (EL015). Based on the clinical 
nature of these procedures, we stated in our proposal that we do not 
believe that an ultrasound room would typically be used to furnish 
these procedures. We proposed to remove inputs for the ultrasound room 
and subsequently include a portable ultrasound (EQ250), power table 
(EF031), and light (EF014). The RUC also recommended that the 
ultrasound machine be allocated clinical staff time based on the PACS 
workstation formula. We stated that we did not believe that an 
ultrasound machine would be used like a PACS workstation, as images are 
generated and reviewed in real time. Therefore, we proposed to remove 
all direct PE inputs associated with the PACS workstation.
    Comment: We received several comments, including from the RUC. 
Commenters disagreed with CMS' proposed work RVU of 1.75 for CPT code 
36474 and requested that CMS finalize the RUC's recommendation of 2.25 
work RVUs. The RUC disagreed with CMS' rationale for the proposed work 
RVU for CPT code 36474. The RUC stated that the ratio between CMS' 
proposed physician time and physician work for the survey code is 
0.058, whereas that same ratio for the key reference code used by the 
RUC is 0.0883, and that the divergent ratios between the two services 
are not comparable.
    Response: The commenters recommended that we accept the RUC-
recommended ratio of 36 percent between the RUC-recommended work RVUs 
for CPT codes 36473 and 36474. We disagree. The RUC survey reported 79 
minutes of total time for CPT code 36473 and 30 minutes of total time 
for CPT code 36474, a decrease of greater than 50 percent between the 
base code and the add-on code. As discussed in the proposed rule, our 
proposed work RVU of 1.75 for CPT code 36474 is supported by the ratio 
between work and time in the key reference service. The RUC 
recommendations made reference to two identical sets of services that 
use differing mechanisms for ablating the vein (radiofrequency 
procedures reported with CPT codes 36475 and 36476 (work RVUs of 5.30 
and 2.65); laser procedures reported with CPT codes 36478 and 36479 
(work RVUs of 5.30 and 2.65)). Both key reference code sets have a work 
RVU ratio of 50 percent (5.30 versus 2.65) between the base codes and 
the add-on codes. Therefore, for CY 2017, we are finalizing a work RVU 
of 3.50 for CPT code 36473 and a work RVU of 1.75 for CPT code 36474.
    Comment: Commenters requested that CMS restore the direct PE inputs 
for the ultrasound room, which includes the PACS workstation. 
Commenters stated that the PACS workstation is needed for these 
procedures to store and make images available for future use.
    Response: Commenters suggested that the ultrasound room was 
necessary for this procedure since the ultrasound room includes a PACS 
workstation that would allow for storage of the images and subsequent 
future use. As we discussed in the proposed rule, during the typical 
procedure, the images would be used in real time rather than being 
stored for subsequent interpretation. Further, the ultrasound room 
would not be typically used during these procedures. Our proposal 
included a portable ultrasound that allows for use of the images during 
the course of the procedure.
    Comment: One commenter requested that CMS include an additional 
direct PE input for a ClariVein catheter for both CPT codes 36473 and 
36474, and included invoices related to this item. The commenter 
suggested that an additional catheter is necessary to prevent 
contamination during treatment of subsequent vessels if the catheter

[[Page 80290]]

used in an initial vessel were reused in a subsequent vessel.
    Response: The invoice data submitted by the commenter appears to be 
applicable to the ClariVein catheters in some instances and in others 
to the ClariVein kits. Our review of the ClariVein kits indicated that 
the ClariVein catheters are part of the ClariVein kits. Because we lack 
clear product data regarding the cost of the ClariVein kits versus the 
ClariVein catheters and whether the catheters are included in the price 
of the kits, for CY 2017, we are finalizing our proposed direct PE 
inputs for the ClariVein kits for CPT codes 36473 and 36474 without 
modification. We welcome additional feedback from stakeholders 
regarding the product data and costs for the ClariVein catheters and 
ClariVein kits for consideration in future rulemaking.
(16) Dialysis Circuit (CPT Codes 36901, 36902, 36903, 36904, 36905, 
36906, 36907, 36908, 36909)
    In January 2015, a CPT/RUC workgroup identified the following CPT 
codes as being frequently reported together in various combinations: 
35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic 
trunk or branches, each vessel), 35476 (Transluminal balloon 
angioplasty, percutaneous; venous), 36147 (Introduction of needle and/
or catheter, arteriovenous shunt created for dialysis (graft/fistula); 
initial access with complete radiological evaluation of dialysis 
access, including fluoroscopy, image documentation and report), 36148 
(Introduction of needle and/or catheter, arteriovenous shunt created 
for dialysis (graft/fistula); additional access for therapeutic 
intervention), 37236 (Transcatheter placement of an intravascular 
stent(s) (except lower extremity artery(s) for occlusive disease, 
cervical carotid, extracranial vertebral or intrathoracic carotid, 
intracranial, or coronary), open or percutaneous, including 
radiological supervision and interpretation and including all 
angioplasty within the same vessel, when performed; initial artery), 
37238 (Transcatheter placement of an intravascular stent(s), open or 
percutaneous, including radiological supervision and interpretation and 
including angioplasty within the same vessel, when performed; initial 
vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient 
fistula/graft), complete evaluation of dialysis access, including 
fluoroscopy, image documentation and report (includes injections of 
contrast and all necessary imaging from the arterial anastomosis and 
adjacent artery through entire venous outflow including the inferior or 
superior vena cava), radiological supervision and interpretation), 
75962 (Transluminal balloon angioplasty, peripheral artery other than 
renal, or other visceral artery, iliac or lower extremity, radiological 
supervision and interpretation), and 75968 (Transluminal balloon 
angioplasty, each additional visceral artery, radiological supervision 
and interpretation). These codes are frequently reported together for 
both dialysis circuit services and transluminal angioplasty services. 
At the October 2015 CPT Editorial Panel meeting, the panel approved the 
creation of nine new codes and deletion of four existing codes used to 
describe bundled dialysis circuit intervention services, and the 
creation of four new codes and deletion of 13 existing codes used to 
describe bundled percutaneous transluminal angioplasty services (see 
discussion of the latter code family in the next section). The Dialysis 
Circuit family of codes overlaps with the Open and Percutaneous 
Transluminal Angioplasty family of codes (CPT codes 37246-37249), as 
they are both being constructed from the same set of frequently 
reported together codes. We reviewed these two families of codes 
concurrently to maintain relativity between these clinically similar 
procedures based upon the same collection of deleted codes.
    For CPT code 36901, we proposed a work RVU of 2.82 instead of the 
RUC-recommended work RVU of 3.36. When we compared CPT code 36901 
against other codes in the RUC database, we found that the RUC-
recommended work RVU of 3.36 would be the highest value in the database 
among the 32 0-day global codes with 25 minutes of intraservice time. 
Generally speaking, we are particularly skeptical of RUC-recommended 
values for newly ``bundled'' codes that appear not to recognize the 
full resource overlap between predecessor codes. Since the recommended 
values would establish a new highest value when compared to other 
services with similar time, we believed it likely that the recommended 
value for the new code does not reflect the efficiencies in time. Of 
course, were there compelling evidence for this valuation accompanying 
the recommendation, we would consider such information. We also noted 
that the reference code selected by the survey participants, CPT code 
36200 (Introduction of catheter, aorta), has a higher intraservice time 
and total time, but a lower work RVU of 3.02 We believe that there are 
more accurate CPT codes that can serve as a reference for CPT code 
36901. As a result, we proposed to crosswalk CPT code 36901 to CPT code 
44388 (Colonoscopy through stoma; diagnostic). CPT code 44388 has a 
work RVU of 2.82, and we believe it is a more accurate crosswalk for 
valuation due to its similar overall intensity and shared intraservice 
time of 25 minutes with 36901 and similar total time of 65 minutes.
    We proposed a work RVU of 4.24 for CPT code 36902 instead of the 
RUC-recommended work RVU of 4.83. The RUC-recommended work RVU is based 
upon a direct crosswalk to CPT code 43253 (Esophagogastroduodenoscopy, 
flexible, transoral), which shares the same 40 minutes of intraservice 
time with CPT code 36902. However, CPT code 43253 has significantly 
longer total time than CPT code 36902, 104 minutes against 86 minutes, 
which we believe reduces its utility for comparison. We instead 
proposed to crosswalk the work RVU for CPT code 36902 from CPT code 
44408 (Colonoscopy through stoma), which has a work RVU of 4.24. In 
addition to our assessment that the two codes share similar 
intensities, CPT code 44408 also shares 40 minutes of intraservice time 
with CPT code 36902 but has only 95 minutes of total time and matches 
the duration of the procedure under review more closely than the RUC-
recommended crosswalk to CPT code 43253. We also note that the RUC-
recommended work increment between CPT codes 36901 and 36902 was 1.47, 
and by proposing a work RVU of 4.24 for CPT code 36902, we would 
maintain a very similar increment of 1.42. As a result, we proposed a 
work RVU of 4.24 for CPT code 36902, based on this direct crosswalk to 
CPT code 44408. For CPT code 36903, we proposed a work RVU of 5.85 
instead of the RUC-recommended work RVU of 6.39. The RUC-recommended 
value is based on a direct crosswalk to CPT code 52282 
(Cystourethroscopy, with insertion of permanent urethral stent). Like 
the previous pair of RUC-recommended crosswalk codes, CPT code 52282 
shares the same intraservice time of 50 minutes with CPT code 36903, 
but has substantially longer total time (120 minutes against 96 
minutes) which we believe limits its utility as a crosswalk. We 
proposed a work RVU of 5.85 based on maintaining the RUC-recommended 
work RVU increment of 3.03 as compared to CPT code 36901 (proposed at a 
work RVU of 2.82), the base code for this family of related procedures. 
We also point to CPT code 44403 (Colonoscopy through stoma; with 
endoscopic mucosal resection) as a reference point for this value. CPT 
code

[[Page 80291]]

44403 has a work RVU of 5.60, but also lower intraservice time (45 
minutes as compared to 50 minutes) and total time (92 minutes as 
compared to 96 minutes) in relation to CPT code 36903, suggesting that 
a work RVU a bit higher than 5.60 would be an accurate valuation. 
Therefore, we proposed a work RVU of 5.85 for CPT code 36903, based on 
an increment of 3.03 from the work RVU of CPT code 36901.
    We proposed a work RVU of 6.73 instead of the RUC-recommended work 
RVU of 7.50 for CPT code 36904. Our proposed value comes from a direct 
crosswalk from CPT code 43264 (Endoscopic retrograde 
cholangiopancreatography), which shares the same intraservice time of 
60 minutes with CPT code 36904 and has a higher total time. We also 
looked to the intraservice time ratio between CPT codes 36901 and 
36904; this works out to 60 minutes divided by 25 minutes, for a ratio 
of 2.4, and a suggested work RVU of 6.77 (derived from 2.4 times CPT 
code 36901's work RVU of 2.82). This indicates that our proposed work 
RVU of 6.73 maintains relativity within the Dialysis Circuit family. As 
a result, we proposed a work RVU of 6.73 for CPT code 36904, based on a 
direct crosswalk to CPT code 43264.
    We proposed a work RVU of 8.46 instead of the RUC-recommended work 
RVU of 9.00 for CPT code 36905. We looked at the intraservice time 
ratio between CPT codes 36901 and 36905 as one potential method for 
valuation, which is a 1:3 ratio (25 minutes against 75 minutes) for 
this case. This means that one potential value for CPT code 36905 would 
be triple the work RVU of CPT code 36901, or 2.82 times 3, which 
results in a work RVU of 8.46. We also investigated preserving the RUC-
recommended work RVU increment between CPT code 36901 and 36905, which 
was an increase of 5.64. When this increment is added to the work RVU 
of 2.82 for CPT code 36901, it also resulted in a work RVU of 8.46 for 
CPT code 36905. Therefore, we proposed a work RVU of 8.46 for CPT code 
36905, based on both the intraservice time ratio with CPT code 36901 
and the RUC-recommended work increment with the same code.
    For CPT code 36906, we proposed a work RVU of 9.88 instead of the 
RUC-recommended work RVU of 10.42. We based the proposed value upon the 
RUC-recommended work RVU increment between CPT codes 36901 and 36906, 
which is 7.06. When added to the work RVU of 2.82 for CPT code 36901, 
the work RVU for CPT code 36906 would be 9.88. We are supporting this 
value through the use of two crosswalks that both share the same 90 
minutes of intraservice time with 36906. These are CPT code 31546 
(Laryngoscopy, direct, with submucosal removal of non-neoplastic 
lesion(s) of vocal cord) at a work RVU of 9.73 and CPT code 61623 
(Endovascular temporary balloon arterial occlusion, head or neck) at a 
work RVU of 9.95.
    The final three codes in the Dialysis Circuit family are all add-on 
codes, which make comparisons difficult to the global 0-day codes that 
make up the rest of the family. We proposed a work RVU of 2.48 instead 
of the RUC-recommended work RVU of 3.00 for CPT code 36907. Due to the 
difficulty of comparing CPT code 36907 with the non-add-on codes in the 
rest of the Dialysis Circuit family, we looked instead to compare the 
value to the add-on codes in the Open and Percutaneous Transluminal 
Angioplasty family of codes (CPT codes 37246-37249). As we stated 
previously, both of these groups of new codes are being constructed 
from the same set of frequently reported together codes. We reviewed 
these two families of codes together to maintain relativity across the 
two families, and so that we could compare codes that shared the same 
global period.
    We proposed the RUC-recommended work RVUs for all four codes in the 
Open and Percutaneous Transluminal Angioplasty family of codes. As a 
result, we compared CPT code 36907 with the RUC-recommended work RVU of 
2.97 for CPT code 37249, which is also an add-on code. These procedures 
should be clinically very similar, since both of them are performing 
percutaneous transluminal angioplasty on a central vein, and both of 
them are add-on procedures. We looked at the intraservice time ratio 
between these two codes, which was a comparison between 25 minutes for 
CPT code 36907 against 30 minutes for CPT code 37249. This produces a 
ratio of 0.83, and a proposed work RVU of 2.48 for CPT code 36907 when 
multiplied with the RUC-recommended work RVU of 2.97 for CPT code 
37249. We noted as well that the intensity was markedly higher for CPT 
code 36907 as compared to CPT code 37249 when using the RUC-recommended 
work values, which did not make sense since CPT code 36907 would 
typically be a clinically less intense procedure. Using the 
intraservice time ratio results in the two codes having exactly the 
same intensity. As a result, we therefore proposed a work RVU of 2.48 
for CPT code 36907, based on this intraservice time ratio with the RUC-
recommended work RVU of CPT code 37249.
    For CPT code 36908, we disagree with the RUC-recommended work RVU 
of 4.25, and we instead proposed a work RVU of 3.73. We did not 
consider the RUC work value of 4.25 to be accurate for CPT code 36908, 
as this was higher than our proposed work value for CPT code 36902 
(4.24), and we did not believe that an add-on code should typically 
have a higher work value than a similar non-add-on code with the same 
intraservice time. We identified two appropriate crosswalks for valuing 
CPT code 36908: CPT code 93462 (Left heart catheterization by 
transseptal puncture through intact septum or by transapical puncture) 
and CPT code 37222 (Revascularization, endovascular, open or 
percutaneous, iliac artery). Both of these codes share the same 
intraservice time as CPT code 36908, and both of them also have the 
same work RVU of 3.73, which results in these codes also sharing the 
same intensity since they are all add-on codes. We therefore proposed a 
work value of 3.73 for CPT code 36908, based on a direct crosswalk to 
CPT codes 93462 and 37222.
    Finally, we proposed a work RVU of 3.48 for CPT code 36909 instead 
of the RUC-recommended work RVU of 4.12. The RUC-recommended value 
comes from a direct crosswalk from CPT code 38746 (Thoracic 
lymphadenectomy by thoracotomy). We compared the RUC-recommended work 
RVU for this procedure to other add-on codes with 30 minutes of 
intraservice time and found that the recommended work RVU of 4.12 would 
overestimate the overall intensity of this service relative to those 
with similar times. In reviewing the range of these codes, we believed 
that a more appropriate crosswalk is to CPT code 61797 (Stereotactic 
radiosurgery (particle beam, gamma ray, or linear accelerator)) at a 
work RVU of 3.48. We believed that this value is more accurate when 
compared to other add-on procedures with 30 minutes of intraservice 
time across the PFS. As a result, we proposed a work RVU of 3.48 for 
CPT code 36909 based on a direct crosswalk from CPT code 61797.
    We proposed to use the RUC-recommended direct PE inputs for these 
nine codes with several refinements. We did not propose to include the 
recommended additional preservice clinical labor for CPT codes 36904, 
36905, and 36906. The preservice work description is identical for all 
six of the global 0-day codes in this family; there is no justification 
given in the RUC recommendations as to why the second three codes need 
additional clinical labor time beyond the minimal preservice clinical 
labor assigned to the

[[Page 80292]]

first three codes. We do not believe that the additional staff time 
would be typical. Patient care already would have been coordinated 
ahead of time in the typical case, and the need for unscheduled 
dialysis or other unusual circumstances would be discussed prior to the 
day of the procedure. We therefore proposed to refine the preservice 
clinical labor for CPT codes 36904, 36905, and 36906 to match the 
preservice clinical labor of CPT codes 36901, 36902, and 36903.
    We proposed to refine the L037D clinical labor for ``Prepare and 
position patient/monitor patient/set up IV'' from 5 minutes to 3 
minutes for CPT codes 36901-36906. The RUC recommendation included a 
written justification for additional clinical labor time beyond the 
standard 2 minutes for this activity, stating that the extra time is 
needed to prepare the patient's arm for the procedure. We agreed that 
extra time may be needed for this activity as compared to the default 
standard of 2 minutes; however, we proposed to assign 1 extra minute 
for preparing the patient's arm, resulting in a total of 3 minutes for 
this task. We did not believe that 3 extra minutes would be typically 
needed for arm positioning.
    We proposed to remove the ``kit, for percutaneous thrombolytic 
device (Trerotola)'' supply (SA015) from CPT codes 36904, 36905, and 
36906. We believed that this thrombolytic device kit and the 
``catheter, thrombectomy-Fogarty'' (SD032) provide essentially the same 
supply, and the use of only one of them would be typical in these 
procedures. We believed that each of these supplies can be used 
individually for thrombectomy procedures. We proposed to remove the 
SA015 supply and retain the SD032 supply, and we solicited additional 
comment and information regarding the use of these two supplies.
    We also proposed to remove the recommended supply item ``covered 
stent (VIABAHN, Gore)'' (SD254) and replace it with the ``stent, 
vascular, deployment system, Cordis SMART'' (SA103) for CPT codes 36903 
and 36906. The Cordis SMART vascular stent was previously used in the 
past for CPT code 37238, which is the deleted code for transcatheter 
placement of an intravascular stent that CPT codes 36903 and 36906 are 
replacing. We did not have a stated rationale as to the need for this 
supply substitution, and therefore, we did not believe it would be 
appropriate to replace the current items with a significantly higher-
priced item without additional information.
    We also proposed to refine the quantity of the ``Hemostatic patch'' 
(SG095) from 2 to 1 for CPT codes 36904, 36905, and 36906. This supply 
was not included in any of the deleted base codes out of which the new 
codes are being constructed, and while we agreed that the use of a 
single hemostatic patch has become common clinical practice, we did not 
agree that CPT codes 36904-36906 would typically require a second 
patch. As a result, we proposed to refine the SG095 supply quantity 
from 2 to 1 for CPT codes 36904-36906, which also matches the supply 
quantity for CPT codes 36901-36903.
    Included in the RUC recommendation for the Dialysis Circuit family 
of codes were a series of invoices for a ``ChloraPrep applicator (26 
ml)'' supply. We solicited comments regarding whether the Betadine 
solution has been replaced by a Chloraprep solution in the typical case 
for these procedures. We also solicited comments regarding whether the 
``ChloraPrep applicator (26 ml)'' detailed on the submitted invoices is 
the same supply as the SH098 ``chlorhexidine 4.0% (Hibiclens)'' 
applicator currently in the direct PE database.
    Finally, we also solicited comments about the use of guidewires for 
these procedures. We requested feedback about which guidewires would be 
typically used for these procedures, and which guidewires are no longer 
clinically necessary.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Dialysis Circuit codes. Due to the large 
number of comments we received for this code family, we will first 
summarize the comments related to general code valuation, followed by 
the comments related to specific work RVUs, and finally the comments 
related to direct PE inputs.
    Comment: Several commenters stated that the cumulative impact of 
reimbursement reductions for the Dialysis Circuit family of codes in 
physician work and practice expense would be quite dramatic. The 
commenters compared the total RVU of the old codes against the total 
RVU of the newly created codes and found a decrease of roughly 20-30 
percent. Commenters expressed concern that if the proposed rates were 
to be implemented, many outpatient access centers that focus on 
providing care for ESRD patients might no longer be able to operate.
    Response: We share the concern of the commenters in maintaining 
access to care for Medicare beneficiaries. We believe that improved 
payment accuracy under the PFS generally facilitates access to 
reasonable and necessary physicians' services.
    We note that a change in overall RVUs for particular services, 
regardless of the magnitude of the change, may reflect improved 
accuracy. For example, comparing the summed total RVU of CPT codes 
36147, 36148, 36870, and 37238 against the total RVU of CPT code 36906 
is an accurate method to describe the services taking place under the 
coding schema effective for 2016 and 2017, respectively. Through the 
bundling of these frequently reported services, it is reasonable to 
expect that the new coding system will achieve savings via elimination 
of duplicative assumption of the resources involved in furnishing 
particular servicers. For example, a practitioner would not be carrying 
out the full preservice work four separate times for CPT codes 36147, 
36148, 36870, and 37238, but preservice times were assigned to each of 
the codes under the old coding. We believe the new coding assigns a 
more accurate preservice time and thus reflects efficiencies in 
resource costs that existed regardless of how the services were 
previously reported.
    Comment: Several commenters objected to the crosswalk codes used by 
CMS for proposed work valuation. Commenters stated that comparing the 
Dialysis Circuit codes to colonoscopy or endoscopic retrograde 
cholangiopancreatography (ERCP) codes was inappropriate, as it 
undervalued the technical skill and judgment necessary to furnish the 
services. In other words, the crosswalks chosen by CMS were invalid due 
to the differences in the procedures in question, with the Dialysis 
Circuit codes being more intensive procedures than the CMS crosswalks.
    Response: We disagree with the commenters that the choice of 
crosswalk codes is inappropriate for work valuation. We believe that, 
generally speaking, codes with similar intensity and time values are 
broadly comparable across the PFS, as the fee schedule is based upon a 
relative value system. For the Dialysis Circuit codes in particular, we 
provided a specific rationale for each crosswalk detailing why we 
believed it to be an appropriate selection. Regarding the statement 
from the commenters that colonoscopy codes, such as CPT code 44388, are 
inappropriate for use as crosswalks in this family of codes, we note 
that the RUC-recommended work RVU for CPT code 36901 was based upon a 
direct crosswalk to the work RVU of a colonoscopy code (CPT code 
45378). We continue to believe that the crosswalks for this family of 
codes are appropriate

[[Page 80293]]

choices, since they share highly similar intensity and time values with 
the reviewed codes.
    Comment: Some commenters disagreed with the use of time ratios for 
work valuation. These commenters stated that the use of direct 
crosswalks based only on intraservice time comparison or ratios of 
intraservice time inappropriately discounted the variation in technical 
skill, judgment, and risk inherent to these procedures.
    Response: We continue to believe that the use of these 
methodologies, including the use of time ratios, is an appropriate 
process for identifying potential values for particular codes, 
especially when the recommended work RVUs do not appear to account for 
significant changes in time. As we stated earlier in our discussion on 
this topic in this final rule, we use time ratios to identify potential 
work RVUs and consider these work RVUs as potential options relative to 
the values developed through other methodologies for code valuation. We 
continue to believe our valuation for the Dialysis Circuit codes 
accurately captures the reduction in physician work caused by the 
efficiencies gained in both time and intensity through the bundling 
together of frequently reported services.
    Comment: One commenter disagreed with the use of CMS comparisons 
between the RUC-recommended work RVUs for the Dialysis Circuit codes 
and the work RVU for other codes with similar time values in the rest 
of the fee schedule, particularly for CPT code 36901. The commenter 
stated that whether or not CPT code 36901 had the highest work RVU 
among other 0-day global codes with 25 minutes of intra-service time 
was irrelevant. The commenter pointed out that some code must be the 
highest value because the RBRVS represents a range of services of 
varying intensity. The commenter stated that CMS' reasoning undervalued 
the importance of work intensity in favor of the more easily 
quantifiable time variable, which was clinically inaccurate and 
contradictory to the principles of the relative value system.
    Response: We disagree with the commenter about the invalidity of 
comparing newly created codes to existing codes with similar time 
values on the PFS. While it is true that there must be a highest value 
for any particular subset of codes, we believe the best approach in 
establishing work RVUs for codes is to compare the service to other 
services with similar times and identify codes with similar overall 
intensities. As we wrote in the proposed rule with regards to CPT code 
36901, we have reservations with RUC-recommended values for newly 
``bundled'' codes that appear not to recognize the full resource 
overlap between predecessor codes. Since the recommended values would 
establish a new highest value when compared to other services with 
similar time, we believe it likely that the recommended value for the 
new code does not reflect the efficiencies gained through bundling. We 
believe that these comparisons to other codes with similar time values 
and intensities are an important tool in helping to maintain relativity 
across the fee schedule.
    Comment: A commenter disagreed with the CMS valuation for these 
codes based on a clinical rationale pertaining to how the services are 
defined. The commenter stated that the dialysis access circuit is 
defined as originating in the artery adjacent to the arterial 
anastomosis and including all venous outflow (whether single or 
multiple veins) to the axillary-subclavian vein junction. While several 
different arteries and veins may be included in this definition, from a 
functional perspective it is a single ``vessel''. The commenter stated 
that because of this greater propensity for multiple lesions in these 
procedures, it is appropriate to define the access vessel as CPT has 
done and allow reporting of only a single angioplasty or stent in that 
entire conduit. However, the commenter reported that the survey built 
on the ``typical patient'' (51 percent of the cases) was unable to 
recognize the additional work of additional angioplasty or stent for 
the Dialysis Circuit family of codes, even though multiple or arterial 
lesions occur with significant frequency. Because the coding structure 
of the Dialysis Circuit family does not include a code for ``additional 
vessels'', the valuation of the codes needs to incorporate the resource 
cost of patient cases where multiple or arterial lesions occur. The 
commenter contended that this problem with the survey methodology 
affected the work intensity of these codes, and justifies a higher 
intensity for these procedures.
    Response: We share the commenter's concerns with the survey data 
collected by the RUC. This is why we have long employed different 
approaches to identify potential values for work RVUs, such as time 
ratios, building blocks, and crosswalks to key reference or similar 
codes, in addition to the recommended survey data. We also note that 
our methodology generally values services based on assumptions 
regarding the typical case, not occasional complications that may 
require additional work when they occur. For the particular case of the 
Dialysis Circuit family of codes, we do not agree with the commenter 
that the single ``vessel'' classification of these procedures supports 
a higher intensity compared to other related codes. These codes have 
been defined by CPT in a similar fashion to the lower extremity 
revascularization codes, in which the code is only billed a single time 
regardless of the number of lesions or number of stents placed. Due to 
the similarity with these existing codes located elsewhere in the PFS, 
we do not believe that it would be appropriate to value the Dialysis 
Circuit codes differently.
    Comment: Several commenters suggested that there was compelling 
evidence for the higher RUC-recommended work RVUs because the vignette 
developed by the CPT Editorial Panel does not accurately reflect the 
typical ESRD patient. Commenters stated that the vignette for the 
Dialysis Circuit codes significantly underestimated the age of the 
typical patient, and may have led survey respondents to report less 
time. According to commenters, the frail and elderly ESRD patients that 
constitute the typical patients for these procedures are much sicker 
than the typical patient in other codes on the PFS, and this serves to 
justify valuing these codes at a higher intensity.
    Response: We appreciate the submission of additional information 
regarding the patient population for these codes. We recognize that 
some services may require additional work due to an unusually difficult 
patient population. However, we do not agree at this time that the 
Dialysis Circuit family of codes has a uniquely different patient 
population that justifies an increase in valuation over other 
comparable codes on the PFS. We note that for CPT code 36901, the RUC 
recommended a work RVU of 3.36 based on a direct crosswalk to CPT code 
45378, a flexible colonoscopy code. Our proposed work RVU of 2.82 for 
the same code was based on a direct crosswalk to CPT code 44388, which 
is another colonoscopy code. The patient population for these two 
crosswalk codes is similar, and both codes share similar time and 
intensity. We believe that our crosswalk code is a more appropriate 
choice given the time values and the efficiencies gained from bundling. 
However, based on this recommended crosswalk code, we believe that the 
RUC considers the patient population for CPT code 45378 to be 
appropriate for comparison to CPT code 36901, and that the reviewed 
code does not possess an unusually resource-intensive patient 
population. This same

[[Page 80294]]

pattern holds true for the other codes in the Dialysis Circuit family, 
which were valued using similar comparisons to established codes with 
typical patient populations.
    Comment: One commenter suggested that the difficulties posed by the 
patient population for the Dialysis Circuit codes were not sufficiently 
reflected in the RUC recommendations. The commenter stated that the 
patients receiving dialysis circuit services are extremely sick, and 
every step in the process of caring for those patients is more complex 
than those involved in caring for the average Medicare patient. The 
commenter stated that CMS underestimated the amount of time required to 
perform specific tasks and assumes that those tasks can be performed by 
individuals with lower levels of training and credentials than are used 
in typical practice. The commenter requested a series of direct PE 
refinements to this family of codes, many of which went above the 
original RUC recommendations, including clinical labor times 
significantly above the usual standards and using clinical labor 
staffing types outside the normal range. The commenter stated an 
intention to present data to support the recommendations at a later 
date.
    Response: We appreciate the additional information provided by the 
commenter about this family of codes. We emphasize that we do not 
believe that the RUC need be the exclusive source of information used 
in valuation of PFS services, and we are supportive of the submission 
of additional data that can aid in the process of determining the 
resources that are typically used to furnish these services. Because we 
did not receive data from the commenter to support these increases 
above the RUC recommendations, we are not incorporating these changes 
into the Dialysis Circuit codes at this time. However, we urge 
interested stakeholders to consider submitting robust data regarding 
costs for these and other services.
    We are also seeking information on how to reconcile situations 
where we have multiple sets of recommendations from the RUC and from 
other PFS stakeholders, both for this specific case and for the 
situation more broadly, given the need to maintain relativity among PFS 
services.
    The following comments address the proposed work valuation of 
individual codes in the family.
    Comment: A commenter contended that the proposed work RVU of 2.82 
undervalues CPT code 36901. The commenter stated that compelling 
evidence regarding CPT's inaccurate description of the typical ESRD 
patient as 45 years old led to lower survey times and hence the ``new 
highest value'' problem mentioned by CMS. The commenter recommended 
that CMS should finalize the RUC work RVU of 3.36, or barring that, 
should finalize a work RVU of 3.02 based on a direct crosswalk to CPT 
code 36200. The commenter stated that this code is very similar 
clinically in work and intensity to CPT code 36901.
    Response: We summarized and responded to the general issues 
surrounding patient populations above. We disagree with the commenter 
that CPT code 36200 is a more appropriate choice for a crosswalk code 
for CPT code 36901. CPT code 36200 has 5 additional minutes of 
intraservice time (30 minutes as compared to 25 minutes) and 25 
additional minutes of total time (91 minutes as compared to 66 
minutes). In addition to this substantial difference in time values, 
the intensity of CPT code 36200 is also significantly lower than CPT 
code 36901. If we were to adopt the recommended crosswalk to a work RVU 
of 3.02, the intensity of CPT code 36901 would be 50 percent higher 
than the intensity CPT code 36200. Since we are statutorily obligated 
to base our valuation on time and intensity, we believe that this makes 
CPT code 36200 an inferior choice for a crosswalk code when compared to 
our choice of CPT code 44388, which shares very similar time and 
intensity with CPT code 36901.
    Comment: A commenter stated that CPT code 36902 should have a 
higher increment in work RVU from CPT code 36901 because it included 
work unable to be accounted for in a survey on the typical patient. The 
commenter indicated that according to published literature, more than 
one stenosis is present requiring angioplasty in 20-30 percent of 
dialysis access cases. A higher increment in work RVU from CPT code 
36901 to 36902 would reflect the work of additional angioplasty on 
separate stenoses and arterial angioplasty that occurs in some cases, 
but cannot be reflected in a ``typical'' 51 percent case vignette. The 
commenter requested that CMS adopt the RUC-recommended work RVU for CPT 
code 36902.
    Response: We generally establish RVUs for services based on the 
typical case. If a particular patient case requires treatment outside 
the defined dialysis circuit code descriptor, then additional catheter 
placement and imaging may be reported, assuming that all of the proper 
requirements for separate billing are met. We do not believe that it 
would be appropriate to increase the work RVU for CPT code 36902 based 
on these non-typical situations.
    Comment: A commenter stated that the CMS proposed work RVU of 5.85 
undervalues the work involved in the services described by CPT code 
36903, based on the belief that the CPT patient vignette does not 
reflect the typical patient and that ``additional vessel'' angioplasty 
or stenting work is included in CPT code 36903 but was not able to be 
captured in a survey utilizing the ``typical'' patient.
    Response: We addressed these issues in previous comment responses. 
We continue to believe that the proposed work RVU for CPT code 36903 is 
accurate.
    Comment: A commenter disagreed with the proposed work RVUs for CPT 
codes 36904 and 36905. The commenter suggested that CMS should use time 
ratios from the base code in the family, CPT code 36901, starting from 
a work RVU of 3.02 instead of the proposed work RVU of 2.82. The 
commenter suggested that this would produce work RVUs for CPT codes 
36904 and 36905 almost identical to the RUC-recommended values, which 
the commenter urged CMS to adopt.
    Response: We agree with the commenter that the use of time ratios 
is one potential method to use in the process of determining code 
valuation. However, since we stated previously that we believe our 
proposed work RVU of 2.82 is more accurate for CPT code 36901 than the 
commenter's suggestion of 3.02, we do not believe that applying the 
same time ratios provides a rationale for adopting the RUC-recommended 
work RVUs for CPT codes 36904 and 36905.
    Comment: A commenter disagreed with CMS' proposed work RVU of 9.88 
for CPT code 36906 based upon the RUC-recommended increment of 7.06 
from CPT code 36901. The commenter stated that the RUC value was well 
supported as the 25th percentile survey result and the survey times for 
the code were adversely impacted by CPT errors in the code descriptor 
and RUC survey limitations.
    Response: We do not agree that the RUC's work valuation for CPT 
code 36906 maintains relativity within the fee schedule. We believe 
that the increment between CPT code 36901 and 36906 maintains 
relativity within the Dialysis Circuit family of codes, which is why we 
proposed to use it for valuation. However, we believe that the 
recommended work RVU for CPT code 36906 insufficiently accounted for 
the efficiencies in resource use achieved through bundling together its 
predecessor codes. We continue to

[[Page 80295]]

believe that the proposed work RVU of 9.88, bracketed between 
crosswalks to CPT codes 31546 and 61623, provides the most accurate 
valuation for this service.
    Comment: A commenter disagreed with the proposed work RVU of 2.48 
for CPT code 36907, and stated that the work RVU should be identical to 
CPT code 37249 at a value of 2.97. The commenter stated these two 
services are clinically identical, and the CMS contention that CPT code 
36907 would typically be a clinically less intense procedure is not 
correct. According to the commenter, the intensity involved in both of 
these add-on codes is the work and risk of crossing the central venous 
stenosis and performing intervention within the thorax where 
complications could be severe. The commenter stated that there is no 
difference in this work intensity based upon the direction of 
approach--from the dialysis access or from a native (femoral) vein. 
Both require advancing a long wire from the access site through the 
stenosis, superior and inferior vena cava, and right atrium, which is 
needed no matter which direction one is approaching the lesion. As a 
result, the commenter suggested that CPT code 36907 should have the 
same work RVU as CPT code 37249.
    Response: While we agree with the commenter that these two services 
are clinically similar procedures, we do not agree with the commenter 
that the work between the two is identical. In particular, we believe 
that the difference in the intraservice time (25 minutes for CPT code 
36907 against 30 minutes for CPT code 37249) should be accounted for in 
the work valuation, as the former code takes 20 percent less time to 
perform. We note as well that under our proposed valuation, these two 
codes have exactly the same intensity, with the difference in the work 
value occurring solely as a result of the decreased time required to 
perform CPT code 36907. Since time is one of the resources we are 
obligated to use for code valuation, we believe that the proposed 
values for these two codes are more accurate than setting both of them 
to the same work RVU.
    Comment: One commenter supported the proposed work RVUs of 3.73 for 
CPT code 36908 and 3.48 for CPT code 36909.
    Response: We appreciate the support from the commenter.
    The following comments address the proposed direct PE inputs for 
the Dialysis Circuit family of codes.
    Comment: Several commenters urged CMS to accept the recommended 
additional preservice clinical labor for CPT codes 36904, 36905, and 
36906. Commenters stated that the patient presentation and the 
requisite preservice clinical labor is inherently different for CPT 
codes 36904-36906 when compared with CPT codes 36901-36903. Commenters 
indicated that the latter group are elective procedures, which are 
scheduled and planned well in advance of the procedure and performed on 
days that do not conflict with the patient's dialysis schedule. In 
contrast, the former group are urgent procedures typically done when a 
patient presents to their dialysis treatment with a thrombosed access. 
According to the commenters, the urgent nature of these procedures, the 
need for additional preoperative testing because of missed dialysis, 
and the need for arranging unscheduled dialysis treatment requires 
additional preservice time for the procedural staff.
    Response: We disagree with the commenters. We continue to note that 
the preservice work description is identical for all six of the 0-day 
global codes in this family. Generally speaking, we also typically 
provide less preservice clinical labor time for emergent procedures, 
not more preservice clinical labor time, as there is no time for these 
tasks to be performed. We continue to believe that all six of these 
codes are most accurately valued by sharing the same preservice 
clinical labor times.
    Comment: Several commenters stated that the recommended 5 minutes 
of clinical labor for ``Prepare and position patient/monitor patient/
set up IV'' were reasonable because these cases are done on the upper 
extremity using portable c-arm fluoroscopy. According to commenters, 
the additional time includes prepping and positioning the arm, applying 
appropriate shielding to the patient's torso, positioning the c-arm 
unit, and then positioning other radiation shielding devices. 
Commenters stated that each of these activities requires more time in 
the arm, which typically must be extended to the side to be accessible 
for access and imaging; this is different from procedures done in the 
long plane of the body including the torso and legs. The commenters 
stated that 5 minutes is a more accurate reflection of the required 
clinical labor time than the proposed 3 minutes.
    Response: We continue to believe that additional time may be needed 
for this activity as compared to the default standard of 2 minutes. 
However, we maintain that the commenter's request for 3 additional 
minutes (for a total of 5 minutes) would not typically be required for 
arm positioning, as this additional clinical labor time is generally 
not included in similar procedures. We do not agree that the additional 
tasks described by the commenters would require the requested 5 minutes 
of clinical labor time, and we are maintaining our proposed value of 3 
minutes.
    Comment: Several commenters opposed the CMS proposal to remove the 
``kit, for percutaneous thrombolytic device (Trerotola)'' supply 
(SA015) from the RUC recommended supplies for CPT code 36904, 36905, 
and 36906, under the belief that only one device would typically be 
used in these procedures. Commenters indicated that this understanding 
was incorrect. According to the commenters, a mechanical thrombectomy 
device and a Fogarty thrombectomy balloon serve different purposes and 
both are necessary to perform a dialysis access thrombectomy. 
Commenters provided lengthy clinical rationales to support their point 
of view, which can be summarized as follows: ``The Fogarty balloon is 
small and highly compliant allowing it to be pulled through the artery 
and into the access without damaging the vessels. The thrombectomy 
device cannot be used safely for this function. This device is larger 
so risks pushing the fibrin plug into the artery if passed across the 
arterial anastomosis from the access--risking distal arterial 
embolization. The device is also much more rigid being made from metal 
and with irregular shape that risks damaging the endothelium of the 
artery causing arterial injury.'' As a result, commenters requested 
that the listed devices ``catheter, thrombectomy-Fogarty'' (SD032) and 
``kit, for percutaneous thrombolytic device (Trerotola)'' supply 
(SA015) both remain in the supply list for these codes.
    Response: We appreciated the detailed presentation of additional 
clinical information regarding the use of the percutaneous thrombolytic 
device kit from the commenters. After review of the comments and the 
contents of the kit, we believe that its inclusion in these three 
procedures is appropriate. According to the device literature, the kit 
contains a rotor for macerating the clot, a catheter for removing the 
clot, and a sheath for introducing the device. We will therefore 
restore the SA015 supply to CPT codes 36904, 36905, and 36906. However, 
we are removing the Fogarty catheter (SD032) and 1 of the 2 vascular 
sheaths (SD136), as these are contained within the kit. The literature 
for the percutaneous thrombolytic device kit clearly stipulates that 
there is no need for additional catheters to remove the clot, which 
makes the

[[Page 80296]]

Fogarty catheter a duplicative supply which can be removed.
    Comment: Several commenters disagreed with the CMS proposal to 
remove the recommended supply item ``covered stent (VIABAHN, Gore)'' 
(SD254) and replace it with the ``stent, vascular, deployment system, 
Cordis SMART'' (SA103) for CPT codes 36903 and 36906. Commenters stated 
that covered stents are the only stent devices that are FDA approved 
and supported by evidence from randomized controlled trials for use in 
dialysis access procedures. They are typically used in recurrent or 
elastic stenosis in dialysis access and have become the standard of 
care for these interventions. One commenter stated that Braid Forbes 
Health Research analyzed stent use in CPT code 37238 using CMS OPPS 
claims data, and found that the covered stent (VIABAHN, Gore), was used 
67.5 percent of the time and the SA103, stent, vascular, deployment 
system, Cordis SMART, was used 32.5 percent of the time. Commenters 
stressed that bare metal stents, such as the Cordis SMART, are not 
indicated for use in the Dialysis Circuit procedures.
    Response: We appreciate the submission of this additional clinical 
information regarding the use of stents for these procedures. After 
consideration of the comments, we are restoring the covered stent 
(VIABAHN, Gore) (SD254) to CPT codes 36903 and 36906 as originally 
recommended. Because we are including the SD254 covered stent, we are 
not adding the stent, vascular, deployment system, Cordis SMART (SA103) 
supply to these procedures.
    Comment: Several commenters disagreed with the CMS proposal to 
reduce the quantity of the Hemostatic patch (SG095) from 2 to 1 for CPT 
codes 36904, 36905, and 36906. Commenters stated that two hemostatic 
patches are necessary in these procedures because they require two 
separate cannulations and sheaths. At the end of the case, both sheath 
sites are removed and covered with a hemostatic patch which aids in 
preventing bleeding and maintaining sterility. The commenters stressed 
that because there are two access sites, two hemostatic patches are 
required, one to cover each site.
    Response: We appreciate the additional clinical information 
submitted by the commenters. In response to this information, we are 
finalizing inclusion of the second Hemostatic patch (SG095) to CPT 
codes 36904, 36905, and 36906, as recommended by the RUC.
    Comment: In response to the CMS solicitation of feedback regarding 
the Chloraprep applicator (26 ml) supply, commenters indicated that 
Chloraprep solution has replaced Betadine solution when performing 
sterile preparation of the dialysis access circuit due to its greater 
efficacy as preoperative skin prep. Commenters indicated that this 
supply was most accurately represented by the submitted invoice. 
Another commenter stated that studies have shown that preparation of 
central venous sites with a 2% aqueous chlorhexidine gluconate (in 70% 
alcohol) is superior for skin site preparation to either 10% povidone-
iodine or 70% alcohol alone, and that in 2002, the CDC recommended that 
2% chlorhexidine be used for skin antisepsis prior to catheter 
insertion. One commenter recommended that CMS replace the Betadine 
povidone soln (SJ041) with two units of swab, patient prep, 3.0 ml 
(Chloraprep) supply (SJ088) in the inputs for CPT codes 36901-36906.
    Response: We appreciate the submission of additional clinical 
information regarding the Chloraprep supply from the commenters. We 
agree with the recommended supply substitution, and we are therefore 
removing 60 ml of the Betadine solution (SJ041) and replacing it with 
two units of the swab, patient prep, 3.0 ml (Chloraprep) supply (SJ088) 
for CPT codes 36901-36906. We will add the Chloraprep applicator (26 
ml) supply to the direct PE input database at a price of $8.48 based on 
an average of the three submitted invoices; it is not currently 
assigned to any codes. We also agree that it is a distinct supply from 
the ``chlorhexidine 4.0% (Hibiclens)'' (SH098) supply already located 
in the direct PE database.
    Comment: Several commenters provided additional information 
regarding the use of guidewires in these procedures. Commenters stated 
that the three wires used in the Dialysis Circuit codes are the minimum 
required for these interventions and frequently additional wires would 
be needed in more complicated cases or in cases in which more than one 
access must be used. Commenters stated that the guidewires submitted 
are the bare minimum needed for the typical case.
    Response: We appreciate the additional information from the 
commenters regarding the use of guidewires. We proposed to use the RUC-
recommended quantities for these supplies, and we are not finalizing 
any changes.
    Comment: One commenter stated that vascular procedures involving 
fluoroscopy or radiography require the use of a radio-opaque ruler 
(SD249) to accurately size or locate tributaries and lesions beneath 
the skin. The commenter indicated that some of the base procedure codes 
(CPT codes 36903 and 36906) include this supply, while it is missing 
from CPT codes 36902 and 36905 and should be included.
    Response: Based upon recommendations from the RUC and specialties, 
we believe that the use of this supply is typical in stent procedures 
such as CPT codes 36903 and 36906. It was included in CPT code 37238, 
which is a predecessor code for these two procedures. However, the 
radio-opaque ruler does not appear to be typical in the other dialysis 
codes and we do not believe that it would be typically required in the 
non-stent procedures, as it was not included in any of the other 
predecessor codes.
    Comment: One commenter requested that CMS include additional 
miscellaneous supplies that were missing or underrepresented in the 
cost inputs. These supplies were not included in the RUC 
recommendations for these codes. The commenter also requested 
increasing the quantity of each category of gloves to 3 and the 
quantity of gowns to 3 for each of the base codes (CPT codes 36901-
36906) to more accurately reflect the typical use of these items in the 
dialysis circuit procedures.
    Response: We believe the supplies as recommended are typical for 
these procedures. We also believe the proposed number of gloves and 
gowns would be sufficient for the typical case; we currently do not 
have any data to suggest that there is a need for additional gloves or 
gowns in these procedures. The remainder of the additional 
miscellaneous items appear to be new supplies with no included 
invoices. Many of these new items may have analogous supplies already 
present in our direct PE database. For the others, we will consider 
pricing them if invoices are submitted as part of our normal process 
for updating supply and equipment costs.
    After consideration of comments received, we are finalizing the 
work RVUs for the Dialysis Circuit codes as proposed. We are also 
finalizing the proposed direct PE inputs, with the refinements detailed 
above.
(17) Open and Percutaneous Transluminal Angioplasty (CPT Codes 37246, 
37247, 37248, and 37249)
    In January 2015, a CPT/RUC workgroup identified the following CPT 
codes as being frequently reported together in various combinations: 
35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic 
trunk or

[[Page 80297]]

branches, each vessel), 35476 (Transluminal balloon angioplasty, 
percutaneous; venous), 36147 (Introduction of needle and/or catheter, 
arteriovenous shunt created for dialysis (graft/fistula); initial 
access with complete radiological evaluation of dialysis access, 
including fluoroscopy, image documentation and report), 36148 
(Introduction of needle and/or catheter, arteriovenous shunt created 
for dialysis (graft/fistula); additional access for therapeutic 
intervention), 37236 (Transcatheter placement of an intravascular 
stent(s) (except lower extremity artery(s) for occlusive disease, 
cervical carotid, extracranial vertebral or intrathoracic carotid, 
intracranial, or coronary), open or percutaneous, including 
radiological supervision and interpretation and including all 
angioplasty within the same vessel, when performed; initial artery), 
37238 (Transcatheter placement of an intravascular stent(s), open or 
percutaneous, including radiological supervision and interpretation and 
including angioplasty within the same vessel, when performed; initial 
vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient 
fistula/graft), complete evaluation of dialysis access, including 
fluoroscopy, image documentation and report (includes injections of 
contrast and all necessary imaging from the arterial anastomosis and 
adjacent artery through entire venous outflow including the inferior or 
superior vena cava), radiological supervision and interpretation), 
75962 (Transluminal balloon angioplasty, peripheral artery other than 
renal, or other visceral artery, iliac or lower extremity, radiological 
supervision and interpretation), and 75968 (Transluminal balloon 
angioplasty, each additional visceral artery, radiological supervision 
and interpretation).
    At the October 2015 CPT Editorial Panel meeting, the panel approved 
the creation of four new codes and deletion of 13 existing codes used 
to describe bundled percutaneous transluminal angioplasty services. The 
Open and Percutaneous Transluminal Angioplasty family of codes overlaps 
with the Dialysis Circuit family of codes (CPT codes 36901-36909), as 
they are both being constructed from the same set of frequently 
reported together codes. We reviewed these two families of codes 
concurrently to maintain relativity between these clinically similar 
procedures based upon the same collection of deleted codes. After 
consideration of these materials, we proposed to accept the RUC-
recommended work RVU for CPT codes 37246, 37247, 37248, and 37249.
    For the clinical labor direct PE inputs, we proposed to use the 
RUC-recommend inputs with several refinements. Our proposed inputs 
refined the recommended clinical labor time for ``Prepare and position 
patient/monitor patient/set up IV'' from 5 minutes to 3 minutes for CPT 
codes 37246 and 37248. The RUC recommendation included a written 
justification for additional clinical labor time beyond the standard 2 
minutes for this activity, stating that the extra time was needed to 
move leads out of X-ray field, check that X-ray is not obstructed and 
that there is no risk of collision of X-ray equipment with patient. As 
we wrote for the same clinical labor activity in the Dialysis Circuit 
family, we agreed that extra time might be needed for this activity as 
compared to the default standard of 2 minutes; however, we assigned 1 
extra minute for the additional positioning tasks, resulting in a total 
of 3 minutes for this task. We did not believe that 3 extra minutes 
would be typically needed for preparation of the X-ray. The equipment 
times for the angiography room (EL011) and the PACS workstation (ED050) 
were also refined to reflect this change in clinical labor.
    We proposed to remove the ``drape, sterile, femoral'' supply 
(SB009) and replace it with a ``drape, sterile, fenestrated 16in x 
29in'' supply (SB011) for CPT codes 37246 and 37248. The two base codes 
out of which these new codes are being constructed, CPT codes 35471 and 
35476, both made use of the SB011 fenestrated sterile drape supply, and 
there was no rationale provided for the switch to the SB009 femoral 
sterile drape in the two new codes. We solicited comment on the use of 
sterile drapes for these procedures, and what rationale there was to 
support the use of the SB009 femoral sterile drape as typical for these 
new procedures.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Open and Percutaneous Transluminal 
Angioplasty codes.
    Comment: One commenter disagreed with the CMS proposed value of 3 
minutes for the ``Prepare and position patient/monitor patient/set up 
IV'' clinical labor task. The commenter stated that the recommended 5 
minutes of time was needed to move leads out of X-ray field, check that 
X-ray is not obstructed and that there is no risk of collision of X-ray 
equipment with patient. The commenter also indicated that the patient's 
arm needs to be positioned on an arm board, and requested time for this 
activity.
    Recommended: We continue to believe that additional time may be 
needed for this activity as compared to the default standard of 2 
minutes. However, we maintain that the commenter's request for 3 
additional minutes (for a total of 5 minutes) would not typically be 
required for preparing the X-ray and conducting arm positioning. We do 
not agree that the additional tasks described by the commenters would 
require the requested 5 minutes of clinical labor time, and we are 
maintaining our proposed value of 3 minutes.
    Comment: Several commenters objected to the proposed replacement of 
the ``drape, sterile, femoral'' supply (SB009) with the ``drape, 
sterile, fenestrated 16in x 29in'' supply (SB011) for CPT codes 37246 
and 37248. Commenters stated that the vast majority of these new 
procedures will be performed from a femoral or jugular approach and 
will utilize a standard femoral drape. According to the commenters, the 
fenestrated drape provides a limited sterile field (16x29in) which does 
not allow room for sterile manipulation of wires and catheters as they 
extend away from the entry into the vascular system. With the creation 
of the new dialysis access circuit CPT code family, commenters 
indicated that the use of extremity access and fenestrated drapes would 
become much less typical for the new angioplasty code set.
    Response: We appreciate the presentation of additional clinical 
information from the commenters regarding the sterile drape most 
appropriate for these procedures. As a result, we are finalizing 
inclusion of the sterile femoral drape supply (SB009) to CPT codes 
37246 and 37248. We will therefore not be adding the fenestrated drape 
supply (SB011) to these procedures.
    After consideration of comments received, we are finalizing the 
proposed work RVUs for the four codes in the family. We are also 
finalizing the proposed direct PE inputs, with the refinement to the 
sterile femoral drape detailed above.
(18) Esophagogastric Fundoplasty Trans-Oral Approach (CPT Code 43210)
    For CY 2016, the CPT Editorial Panel established CPT code 43210 to 
describe trans-oral esophagogastric fundoplasty. The RUC recommended a 
work RVU of 9.00 and for CY 2016, we established an interim final work 
RVU of 7.75 for CPT code 43210. We noted that a work RVU of 7.75, which 
corresponds to the 25th

[[Page 80298]]

percentile of the survey, more accurately reflected the resources used 
in furnishing this service.
    Comment on the CY 2016 PFS final rule with comment period: 
Commenters urged CMS to accept the RUC-recommended work RVU of 9.00 for 
CPT code 43210. The commenters believed that the RUC-recommended value 
compared well with the key reference service, CPT code 43276 
(Endoscopic retrograde cholangiopancreatography (ERCP); with removal 
and exchange of stent(s), biliary or pancreatic duct, including pre- 
and post-dilation and guide wire passage, when performed, including 
sphincterotomy, when performed, each stent exchanged), which has a work 
RVU of 8.94 and an intraservice time of 60 minutes. Commenters believed 
that due to similar intraservice times and intensities, that CPT code 
43210 should be valued nearly identically to CPT code 43276. Some 
commenters also stated that to maintain relativity within the upper GI 
code families, CPT code 43210 should not have a lower work RVU than CPT 
code 43276 since the majority of survey participants indicated that CPT 
code 43210 is more complex than CPT code 43276. Additionally, one 
commenter noted that an esophagogastroduodenoscopy (EGD) is used twice 
during this service, before and after fundoplication. The commenter 
stated that because this is a multi-stage procedure, other EGD codes 
are not comparable. The commenter also pointed out that this technology 
has a small number of users and urged CMS to accept the RUC-recommended 
work RVU of 9.00 until there is additional utilization, and to consider 
reviewing this code again in subsequent years.
    Response in the CY 2017 PFS proposed rule: We referred this code to 
the CY 2016 multi-specialty refinement panel for further review, which 
recommended we accept the RUC-recommended value of 9.00 work RVUs. 
There are four ERCP codes with 60 minutes of intraservice time, three 
of which have work RVUs of less than 7.00 and only one of the four 
codes has a work RVU higher than 7.75 RVUs (8.94). Based on our 
estimate of overall work for this service, we continue to believe that 
the 25th percentile of the survey more accurately reflects the relative 
resource costs associated with this service. Therefore, for CY 2017, we 
proposed a work RVU of 7.75 for CPT code 43210.
    The following is a summary of the comments we received regarding 
our proposed valuation of CPT code 43210:
    Comment: Commenters indicated that the survey results were limited 
since this is a new technology. Commenters requested that CMS finalize 
the RUC-recommended work RVU of 9.00, with the understanding that the 
service will be reviewed again in the near future with more robust 
survey data as the technology continues to be adopted. Commenters 
disagreed with CMS' comparison to other EGD codes for purposes of 
establishing the work RVU, due to differences in the inherent clinical 
procedural steps involved with this code, including that EGD is used 
more than once (pre- and post-fundoplication) to ensure successful 
completion of the procedure.
    Response: While it may be true that multiple EGDs may be performed 
during this procedure, the surveyees are familiar with the service and 
we assume included this information in their proposed time and work 
recommendations. However, the values recommended by the survey and the 
RUC are not consistent with other codes with similar times and 
intensities. We noted in the CY 2016 interim final rule that CPT code 
43240 (Drainage of cyst of the esophagus, stomach, and/or upper small 
bowel using an endoscope) has 10 minutes more intraservice time and a 
work RVU of 7.25. Therefore, we are finalizing for CY 2017 a work RVU 
of 7.75 for CPT code 43210.
(19) Esophageal Sphincter Augmentation (CPT Codes 43284 and 43285)
    In October 2015, the CPT Editorial Panel created two new codes to 
describe laparoscopic implantation and removal of a magnetic bead 
sphincter augmentation device used for treatment of gastroesophageal 
reflux disease (GERD). The RUC noted that the specialty societies 
conducted a targeted survey of the 145 physicians who have been trained 
to furnish these services and who are the only physicians who have 
performed these procedures. They noted that only 18 non-conflicted 
survey responses were received despite efforts to follow up and that 
nine physicians had no experience in the past 12 months with the 
procedure. The RUC agreed with the specialty society that the expertise 
of those responding was sufficient to consider the survey; however, 
neither the RUC nor the specialty society used the survey results as 
the primary basis for their recommended value.
    For CPT code 43284, the RUC recommended a work RVU of 10.13. We 
compared this code to CPT code 43180 (Esophagoscopy, rigid, transoral 
with diverticulectomy of hypopharynx or cervical esophagus (e.g., 
Zenker's diverticulum), with cricopharyngeal myotomy, includes use of 
telescope or operating microscope and repair, when performed), which 
has a work RVU of 9.03 and has identical intraservice time and similar 
total time. We stated in the proposed rule that we believe the overall 
intensity of these procedures is similar; therefore, we proposed a work 
RVU of 9.03 for CPT code 43284.
    For CPT code 43285, the RUC recommended a work RVU of 10.47. We 
used the increment between the RUC-recommended work RVU for this code 
and CPT code 43284 (0.34 RVUs) to develop our proposed work RVU of 9.37 
for CPT code 43285.
    Comment: We received many comments on our proposal from various 
stakeholders including practitioners, manufacturers, the RUC, and 
medical specialty societies representing various surgical specialties. 
For CPT code 43284, commenters indicated that CMS' proposed crosswalk 
from CPT code 43180 was inadequate with regard to time and complexity 
of the services. Commenters stated that CPT code 43180 has 10 minutes 
less immediate post-service time and one less post-operative visit. 
Some commenters stated that it appears that the difference between the 
specialty society median survey total time for 43284 and the total time 
for CMS' proposed crosswalk from CPT code 43180 was too great to 
discount. Commenters also disagreed that CPT code 43284 and CMS' 
proposed crosswalk from CPT code 43180 had similar complexity 
considering that one of the procedures was performed on a natural 
orifice with endoscopy versus a procedure with a surgical incision. 
Commenters indicated that management of surgical patients with 
incisions necessitates a more thorough evaluation of the body than an 
endoscopic procedure.
    For CPT code 43285, commenters noted that although CPT code 47562 
(the RUC-recommended crosswalk) requires more intraservice time than 
the aggregate survey median time for CPT code 43285, the median 
intraservice time may be understated because of the number of people 
without experience, and suggested that the total time for CPT codes 
43285 and 47562 is nearly identical and both require similar work and 
intensity. Commenters stated that only 18 non-conflicted survey 
responses were received despite the efforts of the specialty societies, 
and that nine physicians had no experience with the procedure in the 
past 12 months. Commenters also noted that the RUC recommendations used 
the specialty society survey times, but provided a crosswalk for work 
RVU valuation.

[[Page 80299]]

    Many commenters expressed additional concerns about the specialty 
society survey data, indicating that the survey median and 25th 
percentile work RVUs were inconsistent with the total physician work 
for services reported with CPT codes 43284 and 43285. Commenters stated 
that to accept the results of the survey is to essentially state that 
the opinions of inexperienced surgeons is adequate to determine the 
value of a surgical procedure and lacked input from surgeons 
experienced in performing the procedure. Commenters suggested that CMS 
maintain carrier pricing for services reported with CPT codes 43284 and 
43285 while the specialty societies conduct new surveys that include 
data from surgeons experienced with the procedures. Some commenters 
suggested that the work of CPT codes 43284 and/or 43285 is more similar 
to fundoplication procedures reported with CPT code 43280 (a work RVU 
of 18.10). Other commenters suggested valuations for these procedures 
ranging from 14 to 17 work RVUs, stating that the services reported 
with CPT codes 43284 and 43285 were slightly less complicated than 
fundoplication procedures, but more complex than the valuations 
reflected in the survey results, RUC recommendations, and CMS proposed 
values.
    Response: We appreciate the feedback received from stakeholders 
regarding valuation of these services. After considering the comments 
received, for CY 2017, we are finalizing the RUC-recommended values for 
CPT codes 43284 (a work RVU of 10.13) and 43285 (a work RVU of 10.47). 
We recognize commenters' concerns regarding the specialty society 
survey data and believe these codes may be potentially misvalued. We 
look forward to receiving feedback from interested parties and 
specialty societies regarding accurate valuation of these services for 
consideration during future rulemaking.
(20) Percutaneous Biliary Procedures Bundling (CPT Codes 47531, 47532, 
47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47541, 47542, 
47543, and 47544)
    This group of fourteen codes was reviewed by the RUC at the April 
2015 meeting. We established interim final values for this group of 
codes during the CY 2016 PFS rulemaking cycle, and subsequently 
received updated RUC recommendations from the October 2015 meeting for 
the CY 2017 PFS rulemaking cycle. Our proposals for these codes 
incorporated both the updated RUC recommendations, as well as public 
comments received as part of the interim final status of these 
procedures.
    We received several comments regarding the CMS refinements to the 
work values for this family of codes in the CY 2016 final rule with 
comment period. The relevance of many of these comments has been 
diminished by the new series of RUC recommendations for work values 
that we received as a result of the October 2015 meeting. Given that we 
proposed the updated RUC-recommended work RVUs for CPT codes 47531, 
47532, 47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47542, 
47543, and 47544, we solicited additional comments relative to these 
proposed values. We agreed that the second round of physician surveys 
conducted for the October 2015 RUC meeting more accurately captured the 
work and time required to perform these procedures. The one exception 
was CPT code 47541; the survey times for this procedure were identical 
as conducted for the April and October 2015 RUC meetings, yet the RUC 
recommendation increased from a work RVU of 5.61 in April to a work RVU 
of 7.00 in October. Given that the time values for the procedure 
remained unchanged between the two surveys, we do not understand why 
the work RVU would have increased by nearly 1.50 in the intervening 
months. Since this code also has an identical intraservice time (60 
minutes) and total time (121 minutes) as CPT code 47533, we do not 
agree that it should be valued at a substantially higher rate compared 
to a medically similar procedure within the same code family. We 
therefore proposed to crosswalk the work value of CPT code 47541 to the 
work value of CPT code 47533, and we proposed a work RVU of 5.63 for 
both procedures.
    We also note that many of the codes in the Percutaneous Biliary 
Procedures family were previously included in Appendix G, and were 
valued under the assumption that moderate sedation was typically 
performed on the patient. As part of the changes for services 
previously valued with moderate sedation as inherent, we are removing a 
portion of the work RVU and preservice work time from CPT codes 47532, 
47533, 47534, 47535, 47536, 47538, 47539, 47540, and 47541. For 
example, we proposed a work value for CPT code 47541 with a 0.25 
reduction from 5.63 to 5.38, and a 10 minute reduction in its 
preservice work time from 33 minutes to 23 minutes, to reflect the work 
that will now be reported separately using the new moderate sedation 
codes. CPT codes 47542, 47533, and 47544 also were valued with moderate 
sedation; however, as add-on codes, they are not subject to alterations 
in their work RVUs or work times since the moderate sedation code with 
work RVUs and work time (99152) will only be billed once for each base-
code and not additionally with the add-on codes. These changes are 
reflected in Appendix B and the work time file posted to the web; see 
section II.D for more details.
    For the direct PE inputs, we did not propose to include the 
recommended L051A clinical labor for ``Sedate/apply anesthesia'' and 
the L037D for ``Assist Physician in Performing Procedure'' for CPT 
codes 47531 and 47537. As we wrote in the CY 2016 final rule with 
comment period (80 FR 71053), we believe that this clinical labor 
describes activities associated with moderate sedation, and moderate 
sedation is not typical for these procedures. We also proposed to 
refine the L037D clinical labor for ``Clean room/equipment by physician 
staff'' from 6 minutes to 3 minutes for all of the codes in this 
family. Three minutes is the standard for this clinical labor activity, 
and we continued to maintain that the need for additional clinical 
labor time for this cleaning activity would not be typical for these 
procedures.
    Comment on the CY 2016 PFS final rule with comment period: One 
commenter disagreed with our refinement to replace supply item 
``catheter, balloon, PTA'' (SD152) with supply item ``catheter, balloon 
ureteral (Dowd)'' (SD150). The commenter stated that a Dowd catheter is 
designed and FDA approved for use in the prostatic urethra by 
retrograde placement through the penile urethra, and it is not designed 
for use in an antegrade ureteral dilation procedure. The commenter 
stated that this replacement is inappropriate. The updated RUC 
recommendations for this family of codes also restored the balloon PTA 
catheter.
    Response in the CY 2017 PFS proposed rule: We proposed again to 
replace the recommended supply item ``catheter, balloon, PTA'' (SD152) 
with supply item ``catheter, balloon ureteral (Dowd)'' (SD150). We 
believed that the use of this ureteral balloon catheter, which is 
specifically designed for catheter and image guidance procedures, would 
be more typical than the use of a PTA balloon catheter. While we 
recognize that the Dowd catheter is not FDA approved, it is our 
understanding that the PTA balloon catheter has also not been FDA 
approved for use in these procedures. We were uncertain if the 
commenter was requesting that we should no longer include catheters 
that lack FDA approval in the direct PE database; this

[[Page 80300]]

would preclude the use of most of the catheters in our direct PE 
database. We solicited additional comment on the use of FDA approved 
catheters; in the meantime, we continued our long-standing practice of 
using the catheters in the direct PE database without explicit regard 
to FDA approval in particular procedures.
    We also proposed to remove the recommended supply item ``stone 
basket'' (SD315) from CPT code 47543 and add it to CPT code 47544. 
Based on the code descriptors, we believed that the stone basket was 
intended to be included in CPT code 47544 and was erroneously listed 
under CPT code 47543. We solicited comments from the public to help 
clarify this issue.
    We noted again that many of the codes in the Percutaneous Biliary 
Procedures family were previously included in Appendix G, and as part 
of the change in moderate sedation reporting, we removed some of the 
recommended direct PE inputs related to moderate sedation from CPT 
codes 47532, 47533, 47534, 47535, 47536, 47538, 47539, 47540, and 
47541. We removed the L051A clinical labor time for ``Sedate/apply 
anesthesia'', ``Assist Physician in Performing Procedure (CS)'', and 
``Monitor pt. following moderate sedation''. We also removed the 
conscious sedation pack (SA044) supply, and some or all of the 
equipment time for the stretcher (EF018), the mobile instrument table 
(EF027), the 3-channel ECG (EQ011), and the IV infusion pump (EQ032). 
These changes are reflected in the public use files posted to the web; 
see section II.D for more details.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Percutaneous Biliary Procedures codes.
    Comment: Several commenters disagreed with the proposed work RVU of 
5.45 for CPT code 47541. Commenters stated that although CPT codes 
47541 and 47533 share similar time values, the patient population for 
CPT code 47541 is more complex with post-surgical anatomy and atypical 
problems. Therefore, the commenters stated that the direct crosswalk 
creates a sharp rank order anomaly within the family, and requested 
that CMS adopt the RUC-recommended work RVU.
    Response: We agree with the commenters that the proposed work RVU 
for CPT code 47541 has the potential to create an anomalous 
relationship between the services in this family of codes. After 
considering the comments, we are finalizing a work RVU of 6.75 for CPT 
code 47541, which is the RUC-recommended work RVU of 7.00 after 
removing 0.25 RVUs to account for the fact that moderate sedation will 
now be billed separately for this service.
    Comment: One commenter requested 2 minutes for the clinical labor 
task ``Sedate/apply anesthesia'' and 15 minutes for the clinical labor 
task ``Assist Physician in Performing Procedure'' for CPT codes 47531 
and 47537. The commenter agreed with CMS that moderate sedation was not 
typical for either procedure, but stated that the 2 minutes was for the 
RN to administer the pre-procedure prophylactic antibiotics and the 15 
minutes for assisting the physician was unrelated to moderate sedation.
    Response: We disagree with the commenter that the clinical labor 
time for these tasks would be typical for CPT codes 47531 and 47537. 
For the 2 minutes of apply anesthesia time, we do not agree that this 
clinical labor time should be assigned when the clinical staff is 
performing an entirely different activity. We have not assigned 
clinical labor time in this way in the past, and the request for 2 
minutes related to administering pre-procedure prophylactic antibiotics 
was never discussed in the recommendations for these procedures.
    For the 15 minutes of assist physician time, the commenter did not 
provide a justification for why an additional staff member would be 
needed or what the staff member would be doing. CPT codes 47531 and 
47537 already contain two clinical staff members, one technician to 
assist the physician and another technician to acquire images, plus a 
circulator. The other codes in the Percutaneous Biliary Procedures 
family previously had a third RN clinical staff member to administer 
the sedation to the patient, before moderate sedation was split off 
into its own separate procedure codes. However, CPT codes 47531 and 
47537 do not typically require sedation, and we do not agree that this 
additional clinical staff member would be required to perform the 
procedures.
    Comment: Several commenters again objected to the proposed 
replacement of the recommended supply item ``catheter, balloon, PTA'' 
(SD152) with supply item ``catheter, balloon ureteral (Dowd)'' (SD150). 
Commenters stated that this would not reflect the practice patterns of 
the Interventional Radiology community, as it is atypical and even 
quite rare to use ureteral balloon dilatation catheters in the biliary 
tree. The commenters provided information regarding the size of uretal 
balloon catheters, indicating that the maximum diameter is 8mm (Bard) 
or 7mm (Cook Medical). According to commenters, these sizes are 
frequently inadequate to treat the wide variety of pathologies in the 
biliary tree where often balloon sizes up to 12 mm are required. As a 
result, the commenters stated that the change of the balloon catheter 
supply item does not accurately represents the actual supplies utilized 
in real practice, nor does the Dowd ureteral balloon catheter satisfy 
the clinical need performed during the procedure.
    Response: We appreciate the additional clinical information 
supplied by the commenters regarding the current use of balloon 
catheters. However, although commenters stated that Bard catheters and 
Cook Medical catheters are frequently too small to treat some of the 
wide variety of pathologies that occur in the biliary tree, commenters 
did not indicate what size balloon catheter would be typically used for 
these particular procedures in the Percutaneous Biliary Procedures, or 
provide a specific rationale for why the catheter we proposed (the Dowd 
ureteral balloon catheter) would not be appropriate for these 
procedures. We note again that we are required to assess resources 
based on the typical case, and the commenters did not provide data to 
indicate that the proposed Dowd catheter would be inadequate in the 
typical case for these procedures in question, only that it may be 
insufficient for certain pathologies in the biliary tree. We continue 
to believe that the Dowd ureteral balloon catheter, which is 
specifically designed for catheter and image guidance procedures, would 
be more typical than the use of a PTA balloon catheter.
    Comment: One commenter indicated that the stone basket supply 
(SD315) had indeed been incorrectly assigned to CPT code 47543, and 
thanked CMS for moving it to CPT code 47544 where it was intended.
    Response: We appreciate the response from the commenter.
    After consideration of comments received, we are finalizing our 
proposed work RVUs for the Percutaneous Biliary Procedures family of 
codes, with the one change to a work RVU of 6.75 for CPT code 47541. We 
are finalizing our proposed direct PE inputs without refinement.
(21) Percutaneous Image Guided Sclerotherapy (CPT Code 49185)
    For CY 2016, we established an interim final work RVU of 2.35 for 
CPT code 49185 based on a crosswalk from CPT code 62305 (Myelography 
via lumbar injection, including radiological supervision and 
interpretation; 2 or more regions (e.g., lumbar/thoracic,

[[Page 80301]]

cervical/thoracic, lumbar/cervical, lumbar/thoracic/cervical)); which 
we believed accurately reflected the time and intensity involved in 
furnishing services reported with CPT code 49185. We also requested 
stakeholder input on the price of sclerosing solution (supply item 
SH062) as the volume of the solution in this procedure (300 mL) is much 
higher than other CPT codes utilizing sclerosing solution (between 1 
and 10 mL).
    Comment on the CY 2016 PFS final rule with comment period: In 
response to the CY 2016 PFS final rule with comment period (80 FR 
71054), commenters disagreed with CMS' crosswalk from CPT code 62305. 
Commenters suggested that the RUC's recommended crosswalk from CPT code 
31622 (Bronchoscopy, rigid or flexible, including fluoroscopic 
guidance, when performed; diagnostic, with cell washing, when performed 
(separate procedure)) was a more appropriate comparison due to the 
similarity of the services. Commenters requested that CPT code 49185 be 
referred to the refinement panel. The requests did not meet the 
requirements related to new clinical information for referral to the 
refinement panel. We continue to believe that for CPT code 49185 a 
crosswalk from the value of CPT code 62305 is accurate due to 
similarities in overall work.
    Commenters also stated that the procedure reported with CPT code 
49185 required a separate clinical labor staff type. The commenter 
noted that, due to the inclusion of this additional individual, the 
L037D clinical labor and additional gloves were appropriate to include 
in the procedure. The commenter did not provide any evidence for this 
claim.
    Response in the CY 2017 PFS proposed rule: We continue to believe 
that this additional use of clinical staff would not be typical for CPT 
code 49185. This procedure does not involve moderate sedation, and 
therefore, we do not believe that there would be a typical need for a 
third staff member. Additionally, we did not receive any information 
regarding the sclerosing solution (supply item SH062) that supports 
maintaining an input of 300 mL, which far exceeds the volume associated 
with other CPT codes.
    Therefore, for CY 2017, we proposed a work RVU of 2.35 for CPT code 
49185. We sought stakeholder feedback regarding why a different work 
RVU or crosswalk would more accurately reflect the resources involved 
in furnishing this service. We also proposed to maintain our direct PE 
refinements from the CY 2016 PFS final rule with comment period, but 
proposed to refine the direct practice expense inputs for the 
sclerosing solution (supply item SH062) from 300 mL to 10 mL, which is 
the highest level associated with other CPT codes utilizing sclerosing 
solution.
    The following is a summary of the comments we received regarding 
our proposed valuation of CPT code 49185.
    Comment: Commenters requested that CMS use the RUC-recommended 
crosswalk from CPT code 31622 instead of the CMS-proposed crosswalk 
from CPT code 62305. Commenters stated that CMS' crosswalk undervalues 
the services, the RUC-recommended crosswalk has analougous clinical 
activities during the procedure, as well as a similar risk, and the 
intensity of work involved for services reported with CMS' comparison 
code is less than during sclerotherapy. Commenters suggested that the 
sclerotherapy procedure includes inherent risks and challenges that are 
not adequately accounted for in CMS' proposed crosswalk.
    Response: We disagree with commenters that the RUC's recommended 
crosswalk from CPT code 31622 has analogous clinical activities 
compared to CMS' proposed crosswalk from CPT code 62305. CMS' crosswalk 
code refers to a procedure with injection, drainage, and aspiration, 
which has more clinical similarity to CPT code 49185 than the RUC's 
recommended crosswalk from 31622, which is used to report a broncoscopy 
procedure. We continue to believe that a work RVU of 2.35 is an 
appropriate valuation for services reported using CPT code 49185 and we 
maintain that CPT code 62305 is an accurate crosswalk, since CPT codes 
49185 and 62305 have similar service times. Therefore, for CY 2017, we 
are finalizing a work RVU of 2.35 for CPT code 49185.
    Comment: Commenters disagreed with CMS' proposal to include a 
direct PE input of 10 mL of sclerosing solution (supply item SH062) and 
requested that CMS accept the RUC's recommendation to include 300 ml of 
sclerosing solution as part of the direct PE inputs for this procedure. 
One commenter indicated that other services that utilize sclerosing 
solution are used to describe injection of sclerosant into vascular 
structures which tend to be relatively small in size, and therefore, 
use a much smaller volume. Another commenter stated that for this 
procedure, the sclerosing solution is injected and drained three 
separate times, equating to 100 mL per injection, and that use of 
lesser volumes of sclerosant or less than three administrations of the 
sclerosant during the procedure would allow for more frequent 
recurrence necessitating additional procedures.
    Response: We appreciate the commenters' feedback regarding the 
direct PE inputs for CPT code 49185. We inadvertently included the RUC-
recommended quantity of 300 mL for the sclerosing solution (supply item 
SH062) in developing the proposed rates for this code. For CY 2017, we 
are finalizing the RUC-recommended direct PE inputs, including 300 mL 
of sclerosing solution. We welcome stakeholder feedback regarding the 
appropriate PE inputs for this procedure for consideration for CY 2018, 
including volume and pricing of the sclerosing agent.
(22) Genitourinary Procedures (CPT Codes 50606, 50705, and 50706)
    In the CY 2016 PFS final rule with comment period, we established 
as interim final the RUC-recommended work RVUs for all three codes. We 
did not receive any comments on the work values for these codes, and we 
proposed to maintain all three at their current work RVUs.
    The RUC recommended the inclusion of ``room, angiography'' (EL011) 
for this family of codes. As we discussed in the CY 2016 PFS final rule 
with comment period, we did not believe that an angiography room would 
be used in the typical case for these procedures, and we therefore 
replaced the recommended equipment item ``room, angiography'' with 
equipment item ``room, radiographic-fluoroscopic'' (EL014) for all 
three codes on an interim final basis. We also stated our belief that 
since the predecessor procedure codes generally did not include an 
angiography room and we did not have a reason to believe that the 
procedure would have shifted to an angiography room in the course of 
this coding change, we did not believe that the use of an angiography 
room would be typical for these procedures.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters disagreed with the CMS substitution of the fluoroscopic room 
in place of the angiography room. The commenters stated that all three 
of these procedures were previously reported using CPT code 53899 
(Unlisted procedure, urinary system) which does not have any PE inputs, 
and the RUC recommendations included as a reference CPT code 50387 
(Removal and replacement of externally accessible transnephric ureteral 
stent), which includes an angiography room. The commenters suggested 
that CPT code 50387 was an example of a predecessor code that included 
the use of an angiography room, along with other

[[Page 80302]]

codes that are being bundled together to create the new Genitourinary 
codes.
    Response in the CY 2017 PFS proposed rule: We did not agree with 
the commenters' implication that because CPT code 50387 was an 
appropriate reference code for use in valuation, that it necessarily 
would have previously been used to describe services that are now 
reported under CPT codes 50606, 50705, or 50706. Our perspective was 
consistent with the RUC-recommended utilization crosswalk for the three 
new codes, which did not suggest that the services were previously 
reported using 50706. We did not believe that use of one particular 
code for reference in developing values for another necessarily meant 
that the all of the same equipment would be used for both services.
    We did not believe that these codes described the same clinical 
work either. CPT code 50387 is for the ``Removal and replacement of 
externally accessible transnephric ureteral stent'' while CPT code 
50606 describes an ``Endoluminal biopsy of ureter and/or renal 
pelvis'', CPT code 50705 refers to ``Ureteral embolization or 
occlusion'', and CPT code 50706 details ``Balloon dilation, ureteral 
stricture.'' Additionally, the codes do not have the same global 
periods, which makes comparisons between CPT code 50387 and CPT codes 
506060, 50705, and 50706 even more difficult. We noted that while the 
commenter stated that CPT code 50387 was provided as a reference for 
these procedures, 50387 is not listed as a reference for any of these 
three codes, or mentioned at all in the codes' respective summary of 
recommendations. However, we acknowledged that among the procedures 
that are provided as references, many of them included the use of an 
angiography room, such as CPT code 36227 (Selective catheter placement, 
external carotid artery) and CPT code 37233 (Revascularization, 
endovascular, open or percutaneous, tibial/peroneal artery, unilateral, 
each additional vessel). Therefore, we agreed that the use of the 
angiography room in these procedures, or at least some of its component 
parts, might be warranted.
    Comment on the CY 2016 PFS final rule with comment period: A 
commenter stated that the substitution of the fluoroscopic room for the 
angiography room was clinically unjustified. The commenter stated that 
the angiography room was needed for these procedures to carry out 3-
axis rotational imaging (so as to avoid rolling the patient), ensure 
sterility, and avoid unacceptable radiation exposure to physicians, 
their staff, and their patients. The commenter indicated that the only 
piece of equipment listed in the angiography room that would not be 
typically utilized for these procedures is the Provis Injector. All of 
the other items were used for these Genitourinary procedures. The 
commenter urged CMS to restore the angiography room to these 
procedures.
    Response in the CY 2017 PFS proposed rule: We agreed that it is 
important to provide equipment that is medically reasonable and 
necessary. Our concern with the use of the angiography room for these 
codes was that we did not believe all of the equipment would be 
typically necessary to furnish the procedure. For example, the 
commenter agreed that the Provis Injector would not be required for 
these Genitourinary codes. Therefore, we proposed to remove the 
angiography room from these three procedures and add in its place the 
component parts that make up the room. Table 17 detailed these 
components:

              Table 17--Angiography Room (EL011) Components
------------------------------------------------------------------------
                                Component
-------------------------------------------------------------------------
100 KW at 100 kV (DIN6822) generator
C-arm single plane system, ceiling mounted, integrated multispace
T motorized rotation, multiple operating modes
Real-time digital imaging
40 cm image intensifier at 40/28/20/14cm
30 x 38 image intensifier dynamic flat panel detector
Floor-mounted patient table with floating tabletop designed for
 angiographic exams and interventions (with peistepping for image
 intensifiers 13in+)
18 in TFT monitor
Network interface (DICOM)
Careposition: radiation free positioning of collimators
Carewatch: acquisition and monitoring of configurable dose area product
Carefilter: Cu-prefiltration
DICOM HIS/RIS
Control room interface
Injector, Provis
Shields, lower body and mavig
Leonardo software
Fujitsu-Siemens high performance computers
Color monitors
Singo modules for dynamic replay and full format images
Prepared for internal networking and Siemens remote servicing, both
 hardware and software
------------------------------------------------------------------------

    We included all of the above components except the Provis Injector, 
as commenters indicated that its use would not be typical for these 
procedures. We welcomed additional comments regarding if these or other 
components were typically used in these Genitourinary procedures. We 
lacked pricing information for these components; we therefore proposed 
to include each of these components in the direct PE input database at 
a price of $0.00 and we solicited invoices from the public for their 
costs to be able to price these items for use in developing final PE 
RVUs for CY 2017.
    We also noted that we believed that this issue illustrated a 
potentially broad problem with our use of equipment ``rooms'' in the 
direct PE input database. For most services, we only include equipment 
items that are used and unavailable for other uses due to their use 
during the services described by a particular code. However, for items 
included in equipment ``rooms,'' we allocate costs regardless of 
whether the individual items that comprise the room are actually used 
in the particular service.
    To maintain relativity among different kinds of procedures, we were 
interested in obtaining more information specifying the exact resources 
used in furnishing services described by different codes. We hoped to 
address this subject in greater detail in future rulemaking.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Genitourinary codes:
    Comment: Many commenters objected to the removal of the angiography 
room from these codes and its replacement with the component parts of 
the room. Commenters stated that it was misguided to unbundle the 
components of the angiography room when one equipment item within the 
room is not utilized. They indicated that there are numerous cases 
where an equipment room is used despite the fact that not every item in 
the room is needed for a service, because in practice the rooms are 
configured for the most typical type of procedure performed within the 
room and it would not be efficient or realistic to remove items from a 
room when a less typical service is needed. For the specific case of 
the Provis Injector equipment, commenters stated it could not be used 
elsewhere and there was no way to create a separate angiography room 
for nonvascular procedures that did not require the injector.
    Commenters did not generally agree with the CMS proposal to price 
all of the components of the angiography room at $0.00 pending invoices 
from the public regarding their individual cost. Commenters stated that 
the resource cost of the angiography room components was clearly not 
$0.00, since the equipment in total costs over $1.3 million. Commenters 
stated that it was

[[Page 80303]]

not realistic to submit 21 separate invoices during the 60 day comment 
period, and furthermore that the components of the angiography room are 
typically not sold separately.
    Response: We appreciate the feedback from commenters regarding the 
difficulties involved in pricing the components for the angiography 
room. We have longstanding issues with the equipment rooms as they are 
currently constituted, due to our belief that all of the components of 
the room may not typically be used in performing the procedure in 
question. We continue to believe that these three codes do not make use 
of all of the components of the angiography room, and we believe that 
this code family serves as a clear example of the problems in 
relativity associated with the use of ``rooms'' as equipment items for 
a limited set of services under the PFS. However, we agree with the 
commenters that it is not likely that the components of the angiography 
room do not have a price. Therefore, while we continue to seek invoices 
for more detailed pricing information, we are restoring the angiography 
room (EL011) equipment to these three codes, with an equipment time of 
47 minutes for CPT code 50606, 62 minutes for CPT code 50705, and 62 
minutes for CPT code 50706, in each case consistent with the equipment 
time in CY 2016. We intend to continue to consider the use of equipment 
``rooms'' more broadly for future rulemaking.
    After consideration of comments received, we are finalizing our 
work values for the three Genitourinary codes as proposed. We are 
finalizing the proposed direct PE inputs as well, with the changes to 
the angiography room as detailed above.
(23) Electromyography Studies (CPT Code 51784)
    We identified CPT code 51784 as potentially misvalued through a 
screen of high expenditure services by specialty. This family also 
includes CPT code 51785 (Needle electromyography studies (EMG) of anal 
or urethral sphincter, any technique) but was not included in this 
survey. Both services have 0-day global periods. The RUC recommended a 
work RVU of 0.75 for CPT code 51784. We believe that this service is 
more accurately valued without a global period, since that is more 
consistent with other diagnostic services, and specifically, with all 
the other diagnostic electromyography services. We proposed to 
eliminate the global period and proposed the RUC-recommended work RVU 
of 0.75 for CY 2017. We also proposed to change the global period for 
CPT code 51785 from 0-day to no global period, to be consistent with 
the global period for CPT code 51784. Additionally, we proposed to add 
CPT code 51785 to the list of potentially misvalued codes to update the 
value of the service considering the change in global period, and to 
maintain consistency with CPT code 51784.
    Comment: A commenter supported CMS' proposal to accept the RUC-
recommended work value. The commenter requested that CMS indicate any 
global period changes and requests for codes as part of the family when 
CMS initially nominates a code or reviews the RUC level of interest 
(LOI) prior to distribution.
    Another commenter, while supporting our acceptance of the RUC-
recommended work RVU for CPT code 51784, did not support adding CPT 
code 51785 to the potentially misvalued code list as that code was 
addressed recently when the new CPT codes were created for urodynamic 
testing procedures.
    Response: We appreciate commenters' perspectives. We note that CPT 
code 51785 has not been valued since January 2003, at the same RUC 
meeting wherein CPT code 51784 was valued. We encourage stakeholders to 
submit the entire code family when submitting codes for inclusion on 
the list of potentially misvalued codes.
    Comment: One commenter stated that there is no difference in the 
work value of CPT code 51784 whether it has a 0-day global period 
versus an XXX global period, and should not be considered as 
potentially misvalued.
    Response: We note that CPT code 51784 was identified as potentially 
misvalued through a screen of high expenditure services by specialty. 
In the standard process of code valuation, CMS decided to change the 
global period to XXX, indicating no global period, so that the code is 
more closely aligned with other similar services.
    Comment: One commenter did not agree that CMS should accept the 
RUC-recommended work values, stating that the RUC-recommended work RVU 
underestimates the work involved in furnishing this service.
    Response: We remind commenters and stakeholders that disagree with 
CMS values, including those based on RUC recommendations, that in 
addition to submitting comments on our proposed rules, they may also 
nominate codes as potentially misvalued through the public nomination 
process. After consideration of comments, we are finalizing the work 
and global period changes as proposed.
(24) Cystourethroscopy (CPT Code 52000)
    In the CY 2016 PFS final rule with comment period, CMS identified 
CPT code 52000 through the screen for high expenditure services. We 
stated in the CY 2017 proposed rule that the RUC-recommended work RVU 
of 1.75 for CPT code 52000 is higher than the work RVUs for all 0-day 
global codes with 10 minutes of intraservice time and we did not 
believe that the overall intensity of this service was greater than all 
of the other codes. Instead, we proposed that this code compares 
favorably to CPT code 58100 (Endometrial sampling (biopsy) with or 
without endocervical sampling (biopsy), without cervical dilation, any 
method (separate procedure)), which has a work RVU of 1.53, and has 
identical intraservice time and similar total time. Therefore, we 
proposed a work RVU of 1.53 for CPT code 52000, using a direct 
crosswalk to CPT code 58100.
    Comment: Commenters requested that CMS finalize the RUC-recommended 
work RVU of 1.75 for this procedure. Commenters stated that the RUC-
recommended crosswalk codes were a more accurate comparison of 
physician work, time, and intensity for procedures reported with CPT 
code 52000.
    Response: The RUC-recommended work RVU of 1.75 is higher than the 
work RVUs associated with all other codes with 0-day global periods and 
10 minutes of intraservice time, and we continue to believe that the 
work and intensity of this service is similar to other CPT codes with 
10 minutes of intraservice time. Therefore, we are finalizing a work 
RVU of 1.53 for CPT code 52000.
(25) Biopsy of Prostate (CPT Code 55700)
    In the CY 2016 PFS final rule with comment period, CMS identified 
CPT code 55700 as potentially misvalued based on the high expenditure 
by specialty screen.
    The RUC subsequently reviewed this code for physician work and 
practice expense and recommended a work RVU of 2.50 based on the 25th 
percentile of the survey. We believed the RUC-recommended work RVU 
overestimates the work involved in furnishing this service given the 
reduction in total service time; specifically, the reduction in 
preservice and postservice times. The RUC recommendation also appears 
overvalued when compared to similar 0-day global services with 15 
minutes of intraservice time and comparable total times. To develop a 
proposed work RVU, we crosswalked the work RVUs

[[Page 80304]]

for this code from CPT code 69801 (Labyrinthotomy, with perfusion of 
vestibuloactive drug(s), transcanal), noting similar levels of 
intensity, similar total times, and identical intraservice times. 
Therefore, we proposed a work RVU of 2.06 for CPT code 55700.
    Comments: A few commenters, including the RUC, noted the RUC 
compared CPT code 55700 to other 0-day global services with 15 minutes 
of intraservice time and stated that the RUC-recommended value was 
appropriate. The RUC noted that the overall work of the surveyed code 
was similar to services: CPT code 93503 (Insertion and placement of 
flow directed catheter (eg, Swan-Ganz) for monitoring purposes) (work 
RVU = 2.91, intraservice time of 15 minutes) and CPT code 36556 
(Insertion of non-tunneled centrally inserted central venous catheter; 
age 5 years or older) (work RVU = 2.50, intraservice time of 15 
minutes). The RUC determined that these services required the same 
intra-service time, comparable physician work and intensity and 
recommended CMS accept the RUC-recommended work RVU of 2.50. 
Additionally, the RUC continued to urge specialty societies to submit 
invoices for new equipment.
    Response: We appreciate additional information offered by the 
commenters. After consideration of comments received, we agree with the 
additional information provided by commenters and are finalizing the 
RUC-recommended work RVU of 2.50.
(26) Laparoscopic Radical Prostatectomy (CPT Code 55866)
    In the CY 2016 PFS final rule with comment period, we established 
an interim final work RVU of 21.36 for CPT code 55866 based on a direct 
crosswalk to CPT code 55840 (Prostatectomy, retropubic radical, with or 
without nerve sparing). We stated that we believed these codes were 
medically similar procedures with nearly identical time values, and we 
did not believe that the difference in intensity between CPT code 55840 
and CPT code 55866 was significant enough to warrant the RUC-
recommended difference of 5.50 work RVUs. We also compared CPT code 
55866 to the work RVU of 25.18 for CPT code 55845, and stated our 
belief that, in general, a laparoscopic procedure would not require 
greater resources than an open procedure.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters disagreed with the statement that a laparoscopic procedure, 
such as CPT code 55866, would generally require fewer resources than an 
open procedure, such as CPT code 55840. Commenters stated that 
developing the skill necessary to perform a minimally invasive 
laparoscopic surgery requires a greater degree of experience and 
specialized training than that required to perform an open 
prostatectomy. Commenters indicated that this level of practitioner 
skill should be reflected in the work RVU for the procedure, as 
intensity is based in part upon skill, mental effort, and psychological 
stress.
    Response in the CY 2017 PFS proposed rule: We agreed with the 
commenters that skill and technique, as well as mental effort and 
psychological stress on the part of the practitioner contribute to the 
overall intensity of the furnishing a given service, and therefore, are 
one of the two components in determining code-level work RVUs. However, 
we did not believe that relative increases in requisite skill or 
technique can be considered alone. Although the development of new 
technology (such as robotic assistanc